There's a new trend in the modern real estate market — and it may just be the solution to turning our struggling economy around. Smart home buyers are checking their egos at the door and purchasing smaller homes better suited to their financial standing and choice of lifestyle, "Time Magazine" reports.

As banks tighten up on loans and with unemployment lingering in the back of everyone's mind, home buyers are canceling dreams of owning huge castles - and it turns out smaller homes are all the rage.

It's the one area of real estate that is gaining popularity across all age brackets as younger people are looking for more affordable starter homes and older couples are looking for a more sensible home in which to spend their golden years.

For a growing number of people, smaller homes just make sense. They not only cost less to heat and cool, but in many cases, the owners can make better use of the land surrounding their homes by incorporating many self-supporting attributes such as fruit and eco-friendly energy support systems.

But overwhelmingly, the greatest benefit from shrinking your  dreams is the actual cost of buying it in the first place. On average Americans are forking over more than 34 percent of their income simply to pay their mortgage, reports the U.S. Bureau of Labor Statistics. Professor Jay Shafer, founder of the Tumbleweed Tiny House Company and author of "The Small House Book," said in a recent interview that he didn't understand why people would pay so much to live in a home when they could pay as little as 10 percent of their income if they just downsize their home dreams.

These days, home buyers are looking for homes in which to live a more responsible life, similar to the way our grandparents and great-grandparents did prior to World War II. During that era, people only used what they needed, never took more than what was necessary, and built their homes to be lived in, not for appearance sake.

As our country faces increased challenges on the environmental and financial fronts—the one solution that addresses both of these issues is the tiny house market. If you're considering on making a move to a tiny house here's how you can shrink your house dreams to turn them into a reality.

Step by Step Instructions

• Step 1 Making the transition to a tiny home, for all of its benefits, isn't easy if all you've ever lived in was a traditional-sized home. There are a lot of things you need to consider before finally making the move. Perhaps the hardest thing for many to overcome is coping with such a small living space.
  
  Learning how to cope with the space is the most essential part of owning a tiny home, according to Claire Wolfe of "Backwoods Home Magazine". In her article "The Art of Living in Small Spaces," she recommends learning fairly quickly how to become a "neatnik" by finding a place for everything and putting everything in its place as soon as you're done with it. In a small living space, clutter is more evident than ever, and in many ways, you may find yourself cleaning more often than you would if you lived in a larger home.
  
  As Wolfe explains, besides downsizing your living space, you will be best served by downsizing what you own as well. But if you find it harder than you thought to get rid of your "stuff," you can always build a small or purchase a weather-resistant, instant shed from your local supply store to house the items you can't fit inside your home.
• Step 2 If you're considering building a small house on a purchased lot, be sure to check with the local municipal for zoning regulations. Depending on the area, some municipals won't allow a home to be built if it doesn't meet a certain square footage. These zones are in effect in areas where they consider smaller homes to be a detriment to the overall look of the neighborhood.
• Step 3 Another obstacle tiny home buyers can sometimes face is with their bank or mortgage company. Because these companies thrive on the "bigger is better" mentality, some are wary of financing the tiny home. They don't take the market seriously and worry more about the resale value of the home rather than the initial sale. One way for homeowners to get around this problem is to purchase their tiny home using the equity in their current home, according to The Tiny House Company, based in Central Virginia.
• Step 4 Tiny houses can range from $15,000 up to $90,000, depending on who your builder is, where it's being built, the floor plan and other considerations. But use caution; it can be easy to get caught up in the excitement of adding features, and before you know it, you're back up into the six-figure mortgage arena.
  
  When shrinking your home dreams, keep one foot in reality and remember why you're downsizing in the first place.
• Step 5 The most important aspect of owning a tiny home, or any home for that matter, is how it benefits your life. When choosing a small home, ask yourself if it meets your basic needs. For some tiny home buyers, they opt to purchase a larger lot of land and then have two or three tiny homes built to allow for a more comfortable way of life, or to house older parents or returning home from college.
• Step 6 One of the keys to small home living is to allocate your priorities, says FrontDoor.com, a division of HGTV. Keep what's important and necessary and eliminate what isn't. For some, that may mean choosing between a and a workspace, or a traditional bedroom and a fold away bed in the living room.
• Step 7 Ask yourself how much house you need to feel happy, financially secure and satisfied. Look deep inside yourself—and you just may be surprised by the answer.