Smaller Homes to Grow in Demand, Surveys Suggest

The square feet of new homes is expected to continue its decline in future years. The National Association of Home Builders predicts that U.S. houses will average 2,152 square feet in 2015, which will be down 10 percent compared to last year.

Smaller homes near restaurants and retail may be the most in demand as the housing market crawls out of its slump, housing experts say.

McMansions–which are at least 2,600 square feet–were popular during the years of the housing boom, but now are only desired by 18 percent of households today and is expected to drop more, according to a survey by Trulia.

“Baby boomers are trading down. They don’t need the McMansion, and they don’t want to drive as much,” Jed Kolko, Trulia’s chief economist, told Money Magazine.

Freddie Issues Rule Changes on Short Sales

As of Jan. 1, Freddie Mac will require parties involved in a short sale to sign affidavits that will make them liable for any negligent or intentional misrepresentations in the transaction, HousingWire reports. Mortgage servicers are being urged to implement the change immediately before the Jan. 1 mandate, however.

The move is part of Freddie Mac’s effort to crack down on the rising incidences of short-sale fraud.

“With this change, you will have more information to identify potential mortgage fraud and a clearer understanding of the intent of all parties involved in the real estate transaction,” Freddie said in a statement announcing the rule changes to mortgage servicers last Friday.

In its guidance, Freddie also eliminated a requirement that borrowers who are more than 120 days delinquent are required to list their home for sale before becoming eligible for a deed-in-lieu. The rule changes also included efforts to help mortgage servicers speed up the loss-mitigation process.

Best Housing Markets for Big Bargains

Financial analysis firm 24/7 Wall St. has identified the housing markets expected to offer some of the biggest discounts for home buyers. Many of these markets have been plagued with large gluts of foreclosures that have dragged down prices. In fact, six of the 10 markets on the list have had median home prices fall to less than half what they were five years ago, according to 24/7 Wall St.

The following housing markets offer home buyers some of the biggest discounts:

North Port-Bradenton-Sarasota, Fla.
Median home price: $170,000
Home value decline from peak: -51.4%
Predicted change in home value through 2Q 2012: -6.5%

Riverside-San Bernardino-Ontario, Calif.
Median home price: $180,000
Home value decline from peak: -55.4% (14th biggest decline)
Predicted change in home value through 2Q 2012: -14.8%

Charleston-North Charleston, S.C.
Median home price: $200,000
Home value decline from peak: -23.3%
Predicted change in home value through 2Q 2012: -1.6%

Fort Lauderdale-Pompano Beach, Fla.
Median home price: $199,000
Home value decline from peak: -48.4%
Predicted change in home value through 2Q 2012: -9.2%

Cape Coral-Fort Myers, Fla.
Median home price: $106,000
Home value decline from peak: -59.3%
Predicted change in home value through 2Q 2012: -12.2%