To a growing segment of society, the ownership of large-lot McMansions with two-car garages in some labyrinthine suburb far away from the urban landscape no longer represents the American dream.

Shifting conditions in the U.S. housing market -- punctuated recently by wholesale suburban foreclosures, empty city coffers, escalating crime, traffic woes and other weaknesses in "edge city" -- are making urban life desirable and fashionable again.

Hence, a host of urban villages and transit towns are rising from Seattle to Miami, offering a mix of residential and commercial uses to accommodate America's retreat to Main Street. Driving the "New Urbanist" push is the shrinking American per-household population, which fell from an average of 3.3 people per home in 1960 to a 2009 average of just 2.6, says Scott Bernstein, president of the Chicago-based Center for Neighborhood Technology, which promotes sustainable urban living. "Demographers don't expect that number to go up for a very long time, probably 50 to 100 years," he says.

More people are delaying marriage and childbearing, "plus there are also a lot of single parents and baby boom empty nesters out there looking for the right-size residence," Bernstein says. "And these folks want to feel more connected than they were in those isolating suburbs." At the same time, retirees are living longer and deciding to have a life instead of moving into a retirement home, he says.

Dan Burden, senior urban designer for Orlando, Fla.-based Glatting Jackson Kercher Anglin and executive director of Walkable Communities Inc., says the judicious choice of a mixed-use urban development can help households save 50 percent or more on transportation expenses, especially those with adjacent rail-transit service. Burden says the number of miles driven in 2008 in the United States fell 3.6 percent nationally and hasn't risen this year despite cheaper gas. "Gas price levels are destined to rise above $4 again. It's inevitability," he says.

Pedestrian-oriented living quarters can also make their tenants happier and even healthier. "These are also communities where people can be more physically active and become more socially engaged. They are getting out, seeing people, and bicycling or walking to the park," Burden says. Homes in such live-work-shop-play environments "tend to cost more, but they give you more value per square foot," he says. They are also environmentally friendly because of their sustainable designs and diminished reliance on the automobile.