Numbers Count: Is bigger better for your home?
Numbers count. They matter to bankers and to prospective homebuyers, sellers, and real estate professionals. Here’s my take on the key numbers on the housing market this week.The numbers: About half of all home buyers would like to have three bedrooms in a new home, while 30% would rather have four or more, according to Housing Preferences of the Boomer Generations, a new study from the National Association of Home Builders (NAHB). The survey also found millennial and Gen X buyers want homes over 2,300 square feet, whereas boomers and seniors would like homes under 1,900 square feet. The report found that millennials and Gen Xers tend to live in homes that are significantly smaller than the size home they would like. What counts: How big is big enough? I came across this interesting article about average home sizes around the world – from 484 square feet in Hong Kong, 818 square feet in the U.K., to just over 2,300 square feet in Australia. Most of us would probably opt for a bigger house, given the chance on the premise that bigger is better. But is it? Here are some things to consider when trying to decide how big of a house you need or want:
1) Is your household growing? If you are starting a family and want to stay put, you may want a larger house to accommodate that growing family in the future. Alternatively, you may expect to move to a larger home later, or you may want to remodel and add on to a home to create space for a growing family. If you opt for a smaller house, you may want to consider the feasibility of adding on to the home: Is there yard space to expand, or a garage that could be converted to living space, or could you envision adding another level to the house?
2) Consider heating and cooling costs. Keep in mind that you’re likely going to need to heat and cool most of the square footage in your home, and so more square footage may mean higher energy costs on an ongoing basis. There are various online sites for calculating energy use relative to square footage. For example, the federal government’s Energy Star site provides a guide for air conditioner selection based on square footage. This gives a sense of what is needed to cool various sized living spaces.
3) Where do you spend your time? If you spend most of your time in the living room when you are home, then maybe you don’t need large bedrooms. Or maybe you like to spend time cooking, in which case you may want extra square footage in the kitchen. On the other hand, if you don’t spend a lot of time at home, then maybe you can get by with a smaller home.
4) Do you have a lot of stuff? One thing about a house is that most of us manage to fill the space we have. So the bigger the house, the more likely we are to fill that space with things, even if it is boxes of old junk.
5) What can you afford? Finally, and perhaps most importantly as a starting point, is understanding what you can afford in a home. Getting preapproved for a mortgage may be one of the best first steps so you have a clear understanding of what you can afford based on your income, existing debt payments, and your available cash for a down payment. With a preapproval from a lender you can start your house hunting in the right price range, which may help determine the size of the home you buy.