The Incredible Shrinking Home: The Trend is Small

The Great Recession continues to sap so much of what we Americans hold dear -- our jobs, homes, retirement savings, and optimism. Now comes another low blow: if you do manage to buy a home nowadays, it's likely to be smaller than your neighbor's.

Homes being built now are actually shrinking in size, suggesting that the age of the dreaded McMansion, the hedge fund honcho Greenwich, Connecticut palace and the mega-sized Tony Soprano suburban spread might be nearing an end.

According to the latest U.S. Census Bureau data and stats from the National Association of Home Builders (NAHB), the American home is on a diet. OK, you won't be crammed into a tiny Soviet-style apartment under Obama's Socialist state in the making, but there has been enough shrinkage in home sizes to reverse an enlargement trend that dates back decades.

The median floor area of new homes fell to 2,094 square feet in the third quarter of 2009 from 2,309 square feet at the start of 2007, according to the Census Bureau. It reflects that builders are building in response to the reduced means and inflated concerns of cautious home buyers.

The NAHB has similar findings. Their report claims the average size of a new home fell to 2,480 square feet in 2009 from 2,520 square feet the year before. What's more, the number of new homes with three or more bathrooms declined for the first time since 1992.

Our fundamental belief in the right of every member of the family to have their own bathroom, walk-in closet and changing nook is being challenged. And so what will become of the that cherished design innovation of the boom years, the Great Room?