Home decor is undergoing a subtle change, thanks to the weakened economy and the trend toward smaller but better-quality homes.

As houses are downsized, homeowners are forced to make do with less space and fewer possessions, says Jose J. Cabrera, of C&L Studio in Orlando, Fla. And in this uncertain economy, many homeowners are reluctant to spend lavishly on new furnishings.

“Our clients want fewer things, but really good things,” he says. “It’s a less-is-more approach.”

Another sign of tough economic times impacting interior-design trends: Homeowners are reluctant to throw out all their old furnishings and start from scratch when they build or remodel, they way they did a decade ago, Cabrera says.

“Old things are mixed with new and many styles are being brought together in an eclectic way,” Cabrera says. “The new decor doesn’t evoke any particular period. It’s more a matter of bringing the past into the present and making it fresh with new colors, accessories and art work.”

Over the last few years, homeowners have been scaling back and simplifying their homes, says Troy Beasley, of Beasley & Henley Interior Design in Winter Park, Fla.

“Instead of buying large new homes, they’re staying in their mid-sized homes and either remodeling totally or maybe just moving a wall or two and upgrading the interiors,” he says.

Most people have traditional elements in their homes, says Beasley. These may be heirloom pieces that have been passed down from generation to generation. Or simply the good dining-room or bedroom set a couple bought when they were first married. Either way, they want to keep those traditional elements while modernizing the look of their home.

The design challenge, he says, is to figure out how to create uniformity and harmony while blending traditional and modern elements.

His suggestions: Update formal, traditional chairs and sofas by adding casual slipcovers or reupholstering in contemporary fabrics. Change the wallpaper, light fixtures and moldings. Reframe art work. Show off collectibles all in one spot.

“People want the less-cluttered, cleaner look they see in magazines,” says Beasley.

For one such home in Maitland, Fla., Cabrera was faced with the challenge of combining traditional furniture with modern artwork, while creating an overall look that was lighter and less cluttered.

He started by lightening the colors of the walls and carpeting, using subtle shades of off-white, beige, gold and olive. In the living room, he added an antique mirrored coffee table, and placed two simple Asian vases in bright turquoise on the mantle over the sleek, white-stone fireplace.

In the dining room, the homeowners wanted to keep their heavy, Spanish-style table and captain’s chairs, and to use a large crystal chandelier they had been keeping in storage. Cabrera used off-white linen slip covers on the side chairs and had the end chairs upholstered in striped velvet.

“It’s Mediterranean made modern,” says Cabrera.

It also makes quite a design statement in a relatively small space — without spending a fortune on masses of new stuff.