The New American Dream Home Is One You Never Have to Leave Forget the game room and formal dining. You need space for aging parents and Airbnb guests.

In the southwest corner of Elk Grove, Calif., about 15 miles outside of Sacramento, there’s a shell of a shopping center that was partially built during the peak of the real estate bubble, then abandoned when the market crashed. Locals have taken to calling it the Ghost Mall. Look in one direction from the Ghost Mall and you’ll see farmland. Turn the other way and you’ll see what looks like a brand-new town being built from scratch.

From a distance, the whole thing looks just like the kind of master-planned suburban community that went up along the outermost edges of cities all over America in the early 2000s, before the housing bubble burst. And in many ways, it is. But the American dream of homeownership has changed in the last decade — and so has the American dream home.

A decade ago, a dream home was designed to wow your friends and neighbors. Today, it’s designed to house your relatives. Or your Airbnb guests. And also be your workplace. Homebuilders say one of the biggest selling points in 2018 isn’t a three-car garage or a grand entryway — it’s a home with flexibility.

Now, even as many housing markets have roared back from the bust to boom again, the American dream home is one you never have to leave.

Lennar, the nation’s largest homebuilder, is developing more than 300 of the homes in the master-planned community near the Ghost Mall. One of the most popular models? A home-within-a-home concept called Next Gen — basically a house that has an attached one-bedroom suite with an adjoining hotel-room-style door that can open to the main house, but it doesn’t have to.

A saleswoman gave me a tour of a $570,000, three-bedroom “Spanish eclectic”-style Next Gen model. Inside the apartment-like suite, there was a mini version of the main house’s kitchen, minus the huge island but with the same quartz countertops, on-trend gray cabinetry and bold geometric cube tile backsplash. A marketing flyer framed on the small kitchen table touted the potential: “Home office, separate teen suite or a returning college student’s private pad.” Later, she pointed out a two-story home about a block away that recently sold and told me that the buyers moved into it with their aging parents. “It’s whatever you want it to be!” she said.

With big open rooms, stylish furniture and a walk-in closet off the master bedroom strategically staged with just a handful of purple and gray garments neatly draped on hangers, I knew I was in a nice house — maybe even someone’s dream house. But the dream was tempered. The sales pitch seemed to take into account a new economic reality.

The new emphasis on home flexibility means some once-standard rooms are disappearing. Most of the model homes I toured that day in Elk Grove did not have formal living rooms or dining rooms, floor-plan staples in new homes for at least a hundred years. That’s not unusual. Lennar and other homebuilders say their most popular models today have “great rooms” that combine both, often with smaller total square footage.
“As homes became smaller, rooms need to serve multiple purposes,” said Kermit Baker, the American Institute of Architects’ chief economist. The trade organization started its quarterly home design trends survey in 2005, around the peak of the previous boom, with heavy emphasis on specialized areas like game rooms, wine cellars and media rooms, Mr. Baker said. “Those have largely given way to multipurpose spaces.”

New houses are a little larger than they were a decade ago — though not by much. Median home size dipped after the recession for the first time in years, to 2,135 square feet in 2009, and then peaked again in 2015 at 2,467 square feet. It is once again declining and was at 2,426 in 2017.

To understand how the American home has changed since the housing market crash, it’s helpful to look at how homeownership has evolved. Owning a home wasn’t always baked into the American dream. In 1900, fewer than half of Americans were homeowners. The average house was just 900 square feet.

After World War II the idea that homeownership was some sort of patriotic accomplishment — heavily promoted and partly subsidized by the government, in the form of tax breaks — took off. Homeownership rates began to rise in the 1950s and ’60s, and cookie-cutter tract houses, newly built freeways and cul-de-sacs turned farmland into suburbs during the postwar building boom. In the 1970s, more than 60 percent of Americans owned a home. The median home size was around 1,600 square feet.

In the 1980s and ’90s, home sizes swelled and the McMansion — mass-produced and developer-designed architectural abominations — cropped up everywhere. I asked Jon Jaffe, the president and chief operating officer of Lennar, what the biggest selling point was in the 2000s, just before the recession. “It was just bigger is better,” he said.

The empty or half-built McMansion ultimately became a symbol of that burst bubble, and the shaky mortgages that dragged the whole country down. You could see remnants of the bigger-is-better ethos down the road from another new Lennar community I toured in Elk Grove. Driving along the winding, suburban streets, I came across an older development, built during the previous boom by a different developer. The trees were taller, and the homes looked lived in, with American flags hanging near front doors and basketball hoops in the streets. Most of the decade-old homes felt a bit grander — some had little turrets and wrought-iron balconies. Others had three-car garages, front and center. The newer homes had less ornate exteriors and typically two-car garages.

There was a for-sale sign in front of one of the older homes, a 3,200-square-foot, five-bedroom on a cul-de-sac that was built in 2004. With a quick property-records search, I found out that shortly after it was built, it sold for $457,000. Nine months later, it sold again for $573,000. In 2010, it went for just $285,000. This month it sold for $535,000.