Should You Downsize?

Just after World War II, as GIs returned home and began to raise families, the average American house was 900 square feet. By 1970, bell bottoms were in and the average square footage was 1,300. In 2004, that figure had nearly doubled to 2,330. And homes built in the second quarter of 2008 averaged a whopping 2,629 square feet (it's decreased slightly since then thanks to, um, some recent economic problems). The parents of the largest generation in U.S. history raised their families in houses under 1,000 square feet, so why do we need nearly three times that much space today?

Bigger isn't always better. Large homes cost more to heat and cool (and, as How Efficient Is Your Home? shows, heating and cooling account for the majority of a household's energy use). More bathrooms mean more water use and water-heating costs. Some oversized houses have rooms that are rarely, if ever, used. Bigger homes also cost significantly more in mortgage, insurance, and property tax expenses. And neighborhoods with such homes tend to be far from workplaces, restaurants, and stores, so running errands means driving.

Lots of people are trading their so-called McMansions for smaller, more efficient homes. Not only are they saving money on energy, many also find that a smaller home makes them more aware of consumption (since there's no room for four TVs and three sofas). Downsizing can also bring the family together—replacing, for example, a separate den, media room, and living room with ...

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