Why We're Shunning the McMansion

More home buyers are drawn to accessibility and convenience rather than square footage.

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Getting more comfortable might mean waiting out some of the volatility seen in the housing market over the past couple of years. With tighter credit availability and a plentiful supply of homes for sale, many would-be home buyers are taking a step back and waiting a year or two to get comfortable and familiarize themselves with their market.

[See The Ultimate Spring Home Buyers' Guide.]

"If you were a consumer thinking about buying or renting, at the high end before you didn't have a lot of choices," Miller says. "If you were on the fence, you might have said, 'Oh, we'll just buy.' But now, maybe [they] can delay a year just to get comfortable, then buy."

Despite the increased demand for luxury rentals, Miller says that trend doesn't represent a larger shift away from homeownership. "It's not seen as a permanent retrenchment of people saying 'I'm not going to buy, I'm just going to rent.' It just provides a platform of alternatives for people to delay the decision," he says.

While experts says the fundamental desire to own a home hasn't changed, the conditions under which consumers are willing to purchase homes has shifted. According to the 2011 Community Preference Survey conducted by the NAR, about 6 in 10 adults would rather stay within their budget, even if it meant they could not live in their desired home or community. "It's partly the view people are starting to hold about whether or not they need to stretch as far as they can and then some to purchase what, in their mind, is their ideal home," Bishop says.

[See One Sign the Housing Bust Could End Soon.]

While the allure of the McMansion might be waning for consumers, there's another side to the story, too. Mortgage interest rates are at historic lows—4.80 percent, on average, as of April 21—but tougher underwriting standards and higher down-payment requirements may also have a hand in discouraging would-be McMansion buyers.

Assuming larger homes generally require larger mortgages, nailing down any loan, let alone the "jumbo loans" needed to finance larger, more expensive homes, is tougher than it has been in the past. "The whole McMansion era came about when there was easy access to money and a mortgage. You could get a mortgage with zero percent down, again on the assumption that your home would appreciate," Bohutinsky says. On the other hand, to get a mortgage today, would-be home buyers should expect to put down at least 20 percent. Even tighter credit standards exist for jumbo loans, Bohutinsky says.

Above all, psychologically making the leap of faith this spring may prove to be the strongest deterrent for home buyers. "In thinking about how long you want to hold onto your home, the runway is much longer now. You have to think something around seven years," Bohutinsky says. "When you buy a more expensive home, that's a lot longer to think about having to pay that mortgage every month for seven years. You have to continue to have that good-paying job and not lose that job. It's just a bigger leap of faith to make that commitment than it was before."

Twitter: @mmhandley