Posted by Lending Club :: June 16, 2008 @ 8:47 am

One of the facts often overlooked when discussing how affordable housing is or not is that the new home we buy today is so much more than what it once was. It’s not that the American Dream is that much less attainable today, but that the dream itself is much larger.

According to the National Association of Homebuilders Housing Facts, Figures, and Trends from March 2006, the average size of a new single-family home more than doubled from 1950 to 2004. Average square footages were as follows:

Year	Sq Ft.
1950	983
1970	1,500
1990 	2,080
2004	2,349

Some of the growth, such as having more than one bathroom, seems reasonable. Much of it speaks to the excess we have all become accustomed to. In the Brady Bunch, 6 children shared two bedrooms and one bathroom. Such a situation would be unthinkable in many households today. It isn’t just that buyers have higher expectations of what their homes should include. Builders know that larger homes will fetch higher prices and will likely be more profitable. Building a new home to 1950s specifications wouldn’t be as wise today.

Location still plays a role in the prices we expect to pay. I remember when I first moved to the Midwest, one of my neighbors lamented about the high cost of housing. She was upset because things had gotten so expensive that a person could

"barely buy a starter home for less than $70,000 anymore."

I didn’t have the heart to tell her how easy she had it. Where I had lived on the East Coast, you’d have a hard time finding a starter home for less than $300,000.

One of the reasons people put less money down when purchasing a home is that home prices, even with a cooling housing market, are still quite high. As a result, they end up borrowing more money to purchase their homes. Higher expectations for home size and amenities, along with a lack of new homes with only the bare necessities, are pricing many families out of the new American Dream. Unless we can get past the new perceptions of necessity and are willing to consider more affordable, smaller, or older homes, the dream of home ownership may remain out of reach.