The Next New Wave of Construction?

Rising gas prices will likely push more post-housing bubble home seekers in search of smaller homes closer to urban areas, according to speakers at the “What’s Next: Real Estate in the New Economy” conference sponsored by the Urban Land Institute of North Texas.

More home buyers may be looking for shorter commutes, cheaper mortgages, and to decrease car expenses, which living closer to the city may offer.

“For every car you do not own, you save $8,000 to $10,000 a year,” says keynote speaker Maureen McAvey, ULI’s executive vice president of policy & practice. “That can often increase the mortgage you can afford by $100,000.”

Urban and smaller homes may be most appealing to the twenty-something generation and young married couples, she notes.

McAvey predicts the size of homes will shrink about 20 percent in the future, bringing the home prices more in line with home purchaser’s smaller budgets.

Source: “Smaller Homes, Urban Lifestyles Attractive to New Home Buyers: ULI,” HousingWire (March 21, 2012)