Ever wonder what the biggest house in your childhood neighborhood cost? My Dad used to take us on drives through my town’s most beautiful country club, pointing out generously spaced, stately houses, tucked behind hedges. They promised opulence, security, and perhaps a place where my brother and I could play happily inside, tucked far away from our parents’ drama. I realize today, though, that living in a mansion, or a McMansion, means introducing hidden costs into your life – not only financial ones, but time and stress you’ll never get back.
When Did American Homes Get So Big?
In 1950, the average size of a new single family home in the U.S. was 983 square feet. The GI Bill, with its government mortgage guarantees, contributed to climbing post World War II home ownership rates. From 3 people in 10 owning homes in the early 1940s, rates rose to 62% in 1960. They’ve stayed pretty stable ever since.
Today, new single-family construction averages 2,374 square feet, an increase of 142% since the fifties. Yet smaller families live in each house today versus then. The average inflation adjusted cost of a new 1950 home was $95,721. Even after COVID imbalances calmed down, in 2024 the average home price was $512,200. It soared 435%. Therefore, each square foot of today’s larger houses costs you more now than it did then. Compare $97 per square foot in 1950 to $216 today.
We all realize that larger homes cost more to buy. No doubt a modern home comes with more features and luxury, too. But all those extras also carry ongoing financial costs, demand more time in upkeep, and add a subtle, if real, psychological toll.
Hidden Cost of Big Homes – Financial Pressures Don’t Stop With the Home Cost
Large homes and their attendant price tags might seduce you into stretching your planned budget. Some buyers do this by putting less than 20% down. Beware, however, that this strategy requires mortgage insurance for a conventional or FHA loan. Until your equity hits the 20% mark, you’ll be paying extra each month.
Adjustable-rate mortgages also help size-enamored house buyers rationalize the numbers. “Our income will surely rise to meet the increase, if any!” they tell themselves. A risky bet, however, that sometimes fails to happen. The 2008 mortgage crisis, where home prices plunged after a boom period with loose mortgage lending, led to a severe recession. Confusing mortgage terms surfaced. Many properties became underwater. This meant that people who couldn’t meet their monthly payments also couldn’t sell their homes for enough money to pay off the mortgage balance.
Larger Homes Cost More to Heat, Cool, and Decorate
Once you’ve moved into your dream home, don’t put down your checkbook, credit card, or Venmo account. The larger the house, the larger the totals on your monthly utility bills. Heat in the winter and air conditioning in the summer must work harder in an oversized space. Water to run through more bathroom sinks and to irrigate larger lawns, even to fill up your in-ground pool or hot tub, costs more. Electricity for those premium appliances and smart home devices, and to light more rooms and exterior entrances, adds up.
Resplendent residences require furniture of a scale that fits their interior look, and more of it. Think of the rooms you may not have to furnish in a more modest living arrangement: formal dining room, extra bedrooms, entertainment den, sitting room off of a bedroom, guest rooms, separate living room, even oversized exterior decks and porches. All require furniture, not to mention decorations, and all cost money. In fact those posh dwellings of my youth no doubt cried out for giant chandeliers, elaborate wallpapers and rugs, and antique accents to match the historic styles.
Love the floor-to-ceiling windows in the gigantic master bedroom you’re enamored with? Think about how large any privacy coverings must be. After all, with a coveted address comes more to lose. Which requires security. An alarm system, cameras around the entire periphery, a secure fence, all cost you to install, maintain, and monitor.
With More Space, More Can Go Wrong
Even a well-built domicile needs maintenance, and repair when something goes wrong. All of that square footage means more roof area to sustain hail damage, more stucco to paint, a larger basement to flood, and more gutters to clean. Add these costs, both predictable and emergency level, to your budgeting for your new big home.
Yours might require exterior maintenance of decks, siding, hot tub, pool, awnings, or solar panels. It’ll need periodic painting and pest control. Interiors must likewise be kept well-painted, and flooring, appliances, and lights kept in good condition.
Sudden issues might demand emergency repairs for your pipes, not to mention dealing with unwanted water damage, mold, or pests. Things break and must be fixed, like appliances, HVAC, electrical, or windows.
Taxes, Insurance, and HOA Dues Add to the List of Hidden Costs of Big Homes
Property taxes depend on where you live, as they are assessed at the county level. But as a percentage of value, more expensive properties pay more. Sizeable structures take more time and materials to restore, and therefore bear higher homeowners’ insurance premiums. Add up any disaster-specific insurance you may need, like flood or earthquake.
Looking not only for a big house but one in a newer area with local pools and parks? You may be paying monthly for these amenities in the form of HOA, or Homeowners’ Association, dues. Many neighborhoods tie these to the value or size of a home. HOAs may even have the right to foreclose if these dues aren’t paid.
Look Before You Take a Big Leap
While all of these costs vary with where you live, your residence’s construction materials, and the competitiveness of the local service provider market, it may be possible to at least estimate them. In general, costs go down as a percentage of value as the house gets newer, particularly maintenance and fuel. Eyeonhousing.org estimates that homes built prior to 1960 necessitate more than 6% of their value in total operating costs per year. By contrast, total ongoing annual costs for one built in the 2010s would be about 3.5%. So on a $500,000 house, that’s the difference between $30,000 every single year and $17,500.
Fixed-rate mortgages keep some costs stable. But the rest, the fuels, insurance, utilities, maintenance, and property taxes, all involve variable costs that go up with the market. Buying a home where the last owner failed to keep it up? You’re looking at deferred maintenance on top of it all.
Time and Pressure Add to the Big House Strain
Houses require upkeep, and you’ll do it yourself, right? Well the more vast the rooms, the fewer hours you’ll have left after you’re done. The cleaning, organizing, small repairs, lawn maintenance – think snow removal, tree trimming, and landscaping – can start to resemble a second job. That’s why armies of paid service people descend on upscale neighborhoods while the owners scurry off to work everyday.
Of course with a jumbo home, justifying that jumbo mortgage requires using it on the weekends to its fullest. But entertaining others to momentarily fill your living space takes still more time and money.
Lastly, gorgeous modern interiors seldom stay that way. Styles change and materials go from current to faded. If you’ve ever visited an estate sale, you’ve seen what happens to houses that look like time forgot them. Those tend to get bought by a house-buying company at a song for a major rehaul in order to bring them up to market standard. Therefore, if you want to maintain the investment value of your place, you’ll need to consistently update and upgrade. Even if you hire people to do this, the research, planning, choices, and managing take time and energy.
Small Space Living Saves You Money, Time, and Peace of Mind
The trend toward larger homes in the U.S. peaked in 2015 at 2,465 square feet for an average new one, with costs and lot availability, but also buyer preferences, driving the decrease. Living in a smaller space feels cozier, more human-sized.
Spending less of your income on a house introduces more flexibility. Other priorities become possible. Travel or different career paths beckon. Keeping up with the Joneses turns to chatting with them due to, literally, less space dividing you. Fears of mortgage rate increases or a tumble in the housing market become muted. Smaller closets require less shopping to fill them. Weekends transform, with inviting adventures that don’t involve Home Depot.
Next time you feel the big house pull, try this. Instead of spending so much of your hard-earned cash on buying, spending on, and worrying about where you live, bike over to an open house in one of those sought-after neighborhoods. Browse through the luxury, appreciate this view into a different life, then smile to yourself as you cycle back to small space sanity.
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