When making your budget to buy a home, you should think about the cost of furnishing that home. Whether you plan on decorating it all at once or over time, the size and style of the home will impact the decorating budget. The general rule of thumb when it comes to a budget is that you will spend 25% of the total cost of the home to decorate. This means, a mid-range living room will cost about $14,000.

Obviously there are ways you can increase or decrease your budget. If you buy everything from Pottery Barn, you will spend at least 25% of your home value, but if you go to Ikea that cost will likely go down. The biggest suggestion I can give you when it comes to decorating is that you should live in your new home for a few months before deciding on major furniture pieces because once you have been in a house for a while your ideas might totally change.

A few other ways to help you save money on your decorating budget include giving old furniture a facelift with new paint, fabric, accessories; building it yourself such as coffee tables, end tables, liquor cabinets; and splurging on one big bold piece of furniture in a room and accenting it with cheaper things.

The decorating trends for 2012 are not about flashy, over-the-top design; but rather, about decorating for real life. Homeowners and decorators will be trying to tell a story through their decorating, with pieces that put a personal stamp on their spaces. People are stylizing the most-used room in the home—the kitchen—by adding workstations, artwork, photography and more furniture-like cabinetry enhanced by decorative cabinet knobs and pulls.

In a recent survey, people looking to buy a home listed the following as the most important rooms.

  • Kitchen – 90% of respondents
  • Master Bedroom – 79% of respondents
  • Family Room – 34% of respondents
  • Garage – 31% of respondents
  • Living Room – 26% of respondents
  • Basement – 26% of respondents

As the economy slowly improves and some consumers’ anxieties ease, buyers are upsizing again. In recent years, most borrowers were looking for homes with about 2,200-2,300 square feet. They were trying to downsize and get rid of high mortgage payments. But over the past year the average square footage has risen to about 2,500. And in some parts of the country, it has risen even higher. One New Jersey developer has clients who, previously were asking for homes in the 3,500 to 5,500 square foot range, are now asking for 7,000+ square foot homes.

The news gets bigger…I mean better! According to the National Association of Home Builders, the sale of newly built homes rose 3.3% in April and 9.9% over last year. Thirty percent of those homes were 3,000 square foot or bigger, which means the McMansions are back!  In some cases, builders are making homes larger for the same price as a smaller one would cost to increase sales. They are making rooms more spacious, adding crown molding and making kitchens larger to appeal to the buyers.

Sales of single-family homes regardless of price were up 19 percent for the first four months of 2012 compared with the same period last year. In April, the average home price was $282,600, up from $268,900 a year earlier, according to census data, though that is down from $329,400 in early 2007.

Check out this story from the Wall Street Journal for more.

On the flip side, here are 10 tiny homes you will just love.