Smaller House, Smaller Burden

"New homes, after doubling in size since 1960, are shrinking. Last year, for the first time in at least 10 years, the average square footage of single-family homes under construction fell dramatically, from 2,629 in the second quarter to 2,343 in the fourth quarter, Census data show."

"'It's a return to common sense and what really matters,' says architect Marianne Cusato, who designed the Katrina Cottage, a modular kit house for people who were displaced by the 2005 hurricane."

"Cusato says the banking collapse last fall prompted her to co-design what she calls 'The New Economy Home.' In 1,500 square feet, it has three bathrooms, a half-bath and four bedrooms, one of which can be used as a rental unit."

"Kermit Baker, chief economist of the American Institute of Architects, says plummeting home values, however, have caused many people to stop seeing houses as an investment but rather as a place to live. He says home-size declines probably will continue among high-end buyers, who began scaling back even before the recession."