Could the housing boom days of outrageous McMansions be making a comeback?
At first glance, new data point to yes. The average size of a newly built home rose last year, according to just-released data from the Census bureau, cited on MSNBC. The average new American home last year was 2,480 square feet, an increase of 88 square feet from 2010. The average size of a new home peaked at 2,521 square feet in 2007 when many Americans were at the height of a home-buying frenzy fueled by easy credit. New home-builders constructed ever larger McMansions to cater to demand.
This time around, the growth in home size is much less democratic: Rich people are driving the trend to bigger homes. According to the National Association of Home Builders, last year rich people bought bigger and more luxurious homes. They had the right idea: It's a good time to buy, if you can afford it and have the credit rating to secure a mortgage. Home prices are still languishing at low levels.
The 30-year mortgage rate fell to a record low at the end of May, according to Freddie Mac.
And, homeownership is cheaper than renting in 98 of the 100 largest metropolitan areas, according to the real estate website Trulia. Renting cost 15 percent more than owning a home at the end of 2011, according to analysis by Deutsche Bank cited by the Wall Street Journal. That is largely because the supply of rentals has not risen as quickly as the demand for rentals, since more people now have been shut out of the housing market.