Frugality defines the new homebuyer: harvard

When studying foreclosures nationwide, the Joint Center for Housing Studies at Harvard University found that smaller homes stand to benefit as future homeowners turn toward more affordable, efficient housing.

In its "State of the Nation's Housing" report, the center said more younger and older homeowners are expected in the coming decades. But rather than searching for larger dream homes, the new consumer will be focused on rental properties and smaller residences. And even with the report predicting that many baby boomers will age in place, the current mobility rate suggests at least 3.8 million could downsize their homes over the course of the next decade. Their preference is likely to be smaller residences.

This turn toward frugality comes from the myriad problems in the housing market, which includes millions of homeowners underwater, record-low home sales, and downward spiraling home prices, the Harvard center said.

Not to mention, middle-income homeowners — those making in the range of $45,000 to $60,000 — are facing severe cost burdens, with more than half of their income going toward housing in the year 2009.

Source: HousingWire.com