When mortgage rates drop, usually the housing market heats up. What's hot in new homes? Fewer walls, more toys.
Buyers are looking for open spaces in the main area of the home with oversized kitchens that flow into large family rooms. When it comes to the master bathroom, buyers are looking for a little luxury.
"We're basically seeing larger kitchen areas and more open floor plans with vaulted ceilings," says Dick Koestner, a regional vice president with the National Association of Realtors and partner in Koestner McGivern & Associates in Davenport, Iowa.
Buyers want something "far less formal and far more celebratory," says Ron Phipps, a regional vice president of the National Association of Realtors.
Living rooms are going the way of the powder blue tuxedo. "The real formal living room is gone," says Joan Isgro-Grant, an affiliate of Weichert Realtors in Kingston, N.Y.
Homeowners are also demanding more for the money. And with lower interest rates, they are not afraid of buying more home. "What they look at isn't the cost, it's the monthly payment," says C. D. Boring, president of RE/MAX Realty Plus in Sebring, Fla.
That translates to higher-grade appliances, more wood, more tile, more solid surface countertops and more designer touches in mid-priced to high-end homes.
"It amazes me," says Phipps, president of Phipps Realty and Relocation Services in Warwick, R.I. "Even in modest homes, you have much more money allocated for cabinets, countertops, appliances and raw space."
Homeowners may be eating out as much or more than ever, but they are using their kitchens to entertain and as a gathering place for the family. As a result, "builders are putting more money in kitchens," says C. Kent Conine, president of the National Association of Home Builders, an industry trade group.