The amount of billings for architects increased for the first time since the middle of 2007, on the back of rising demand for smaller houses, according to a survey from the American Institute of Architects (AIA). Kermit Baker, AIA chief economist, said it is the first encouraging sign in two years that an economic recovery is near. “The home improvement market, including both additions and structural alterations as well as remodeling projects, continues to be the healthiest sector of the market,” Baker said. AIA conducted a survey of 500 architecture firms that concentrate practices in the residential sector. AIA also found that American homebuyers are showing greater interest in smaller homes and lot sizes. According to the survey, the economic downturn and growing concerns over rising utility costs have created a demand for smaller homes and lot sizes. The findings echo a report from the National Association of Home Builders (NAHB) that showed the average floor space of the single-family home averaged 2,438 square feet in a 2009 report from the Census Bureau, down from 2,521 in 2007. “We continue to move away from the ‘McMansion’ chapter of residential design, with more demand for practicality throughout the home,” Baker said. “And with that there has been a drop off in the popularity of upscale property enhancements such as formal landscaping, decorative water features, tennis courts and gazebos.” Baker added that there has been a steady decline in square footage in home design in recent years. “The preference instead seems to be for more flexible, open and informal layouts that allow for both ease movement and fostering a space more conducive to family living,” Baker said. Write to Jon Prior.