R.I.P. McMansions

Sept. 14, 2007 — -- The latest victim of the mortgage crunch is the McMansion, huge homes on small lots that have soared in popularity since the early '90s.

In fact, the number of new homes with four bedrooms or more has doubled in the last two decades — even as the size of the average family has shrunk.

In partnership with The Wall Street Journal, ABC News looked at the troubled housing market, where it seems bigger isn't always better.

Builder Ron Delino is about to put a 4,000-square-foot home in Chatham, N.J., on the market, a market that's not what it once was.

"It's definitely in a down cycle. Two years, three years ago there were knockdowns all over the area. Any builder could come in, built a house and sold it. No risk," Delino said.

Now, new-home sales are down 10 percent nationwide. Buyers are struggling to keep up with huge McMortgage payments and America is downsizing.

"It may be time for the end of the McMansion. Certainly the large expansion in home sizes we've seen over the last couple of years may be coming to a halt," said Kelly Evans of The Wall Street Journal.

For builders, it's looking smarter to build smaller and make adjustments along the way. Gone may be the days of high-end marble countertops, the best light fixtures and kitchen cabinets.

And McMansions aren't the only homes that are downsizing.

KB Home, one of the nation's largest home builders, used to build homes that averaged 2,400 square feet — now it's shaving 200 or 300 square feet off its floor plans.

According to Jess Mezger, president and CEO of KB Home, "2,300 square feet equates to $10,000 to $20,000 off the price — that's a big savings."