Home buyers are turning away from massive homes as Zillow points to the end of the McMansion trend

For years, the big suburban dream came wrapped in the same package: a huge house, oversized rooms, extra spaces nobody fully needed, and a sales pitch built around square footage.

Now that formula may be wearing out.

In a Fox Business “Varney & Co.” segment, host Stuart Varney and M2 Communities CEO Mitch Roschelle discussed a new Zillow report suggesting the era of the McMansion may be coming to an end. Their conversation covered more than just home size. It also touched on stubborn sellers, too many real estate agents chasing too few listings, higher earners dominating parts of the market, and changing buyer preferences that no longer match the old cookie-cutter model.

Taken together, it painted a housing market that feels much different than the one Americans got used to in the years before rates jumped and affordability cracked.

And honestly, that shift makes sense. When the math gets brutal, people start asking harder questions about what they actually need.

Too Many Agents, Not Enough Homes

Varney opened with a striking number: there are now 30% more realtors than homes for sale.

That is not a healthy market for agents, and Roschelle did not try to pretend otherwise. He said flatly that it is “absolutely not” a good time to be a realtor.

According to Roschelle, there are about 1.3 million listing agents and only around 1 million homes on the market. That imbalance, in his view, says something important about the mood of the market. Sellers still think their homes are worth more than buyers are willing to pay.

He told Varney that sellers’ expectations remain “considerably higher than what the market can bear.” That gap, he argued, is creating a built-in inefficiency. If the price comes down, a buyer will usually appear. But that does not happen quickly enough because too many listings start high, and too many realtors are willing to take those listings at unrealistic numbers.

That is a pretty sharp criticism of the business, but it rings true.

A house can sit because buyers vanished, but it can also sit because the price is fantasy. Roschelle’s point is that the market itself is still fairly efficient underneath all the noise. The problem is that sellers and agents often delay reality.

That delay matters because it freezes activity. Homes linger. Agents compete over too little supply. Buyers stay on the sidelines longer. And the market starts to feel jammed even when the deeper problem is just bad pricing discipline.

Higher Earners Are Still Driving The Market

Varney then turned to another idea floating around the housing debate: that high earners, more than supply shortages alone, are helping keep prices elevated.

Roschelle mostly agreed, though he immediately pushed back on one part of the premise. He said $100,000 a year no longer really feels like “high earner” status, especially when mortgage rates, property taxes, and homeowner’s insurance are all taken into account.

That was one of the more revealing parts of the conversation.

For a long time, six figures sounded like clear upper-middle-class money. In much of the housing market now, it sounds more like survival income with less room than people expect. Roschelle said a joint income at that level probably is not enough to comfortably buy the $409,000 median-priced home once all the real carrying costs are added up.

That is a brutal reality check.

He also reminded viewers that $409,000 is just the national median. Half the homes being sold are above that number, and some of the strongest activity remains in the $2 million to $3 million range. In other words, the market is still moving, but much of the movement is happening where wealth is already concentrated.

That helps explain why the market can feel frozen to ordinary buyers while still looking active on paper. Homes are selling. Just not necessarily to the people who need financing the most.

Roschelle also pointed to the suburbs around New York as an example. He said homes there are hitting the market and selling immediately because people still want out of New York City. That is not a broad-based affordability story. It is a story about specific buyers with strong resources chasing specific locations.

Cash Buyers Still Have A Huge Edge

Varney also asked whether cash buyers remain common, especially those using stock-market gains or borrowed money against investment portfolios to jump into real estate.

Roschelle said yes, though he noted that the cost of borrowing against brokerage accounts has risen along with interest rates. Even so, he explained why it still makes sense for some wealthy buyers.

His example was simple and telling. If someone owns a stock like Microsoft with an old, very low cost basis, they may not want to sell it and hand a big chunk of the gains to the government in taxes. Instead, they can borrow against the appreciated asset and use that money for real estate.

That is a different universe from the average American buyer trying to scrape together a down payment.

And that gap matters because it shows why affordability feels so uneven. Roschelle and Varney were talking about a layer of the market where people are not choosing between a mortgage and rent. They are choosing between tax strategies.

That kind of buyer is still a major force, and it helps keep pressure on desirable markets even when regular financed buyers are being squeezed hard.

It also helps explain why large, expensive homes do not necessarily vanish overnight. Wealthy buyers still exist. But the broader cultural pull of the giant suburban status house may be fading.

Why The McMansion Is Losing Its Appeal

That brought the segment to the Zillow point that stood out most: the claim that the McMansion era is over.

Varney described the McMansion in familiar terms, as the cookie-cutter oversized home built in rows, and asked Roschelle why that era may be ending.

Roschelle’s answer was more interesting than a simple “people want smaller homes now.”

He said social media has played a role because buyers increasingly want something distinctive. They do not necessarily want the same giant house with the same layout that dozens of other people have on the same block.

That feels right. A lot of modern consumer culture pushes people toward personalization, and housing is no exception. Buyers are not just shopping for square footage anymore. They are shopping for fit.

Roschelle also said the old prototype of a McMansion, usually something around 4,000 square feet or larger, was built for a different moment. Back then, those houses often included features like a home theater, which used to signal luxury and extra space.

Now, he said, that kind of room is much less useful.

The modern buyer, according to Roschelle, is more likely to want two offices than a home theater. He specifically mentioned combinations like “his and hers,” “his and his,” or “hers and hers” offices, reflecting how working from home has permanently changed what households need from a house.

That point probably gets closest to the real reason the McMansion model is slipping. It is not just that people want less space. It is that they want space used differently.

A giant bonus room does not impress people as much if it does nothing for daily life.

The Bonus Room Problem

Varney jumped in with a line that was both funny and more revealing than it first sounded. He said he never liked the idea of a bonus room.

Roschelle answered with a story from his own life. He said his home in New York had recently suffered flooding from a pipe, and joked that a bonus room is not much of a bonus when it is under six inches of water.

It was a light moment, but it actually underscored the larger point of the segment.

Extra space sounds exciting when money is cheap and optimism is high. It sounds less exciting when every room carries heating, cooling, furnishing, maintenance, repair, and insurance costs. The larger the house, the more expensive every problem becomes.

And people are starting to feel that.

A giant room that barely gets used can start to look less like luxury and more like one more thing to pay for, clean, insure, and fix.

That is part of why I think the Zillow conclusion makes sense. The McMansion is not just falling out of style because of aesthetics. It is falling out of style because people are rethinking waste.

Buyers Want Fit, Not Just Size

What Roschelle seems to be saying, and what Varney’s questions helped bring out, is that the market is moving away from the old formula that bigger automatically means better.

That does not mean Americans suddenly hate large homes. It means they are asking different questions.

Does the layout actually match how people live now? Are there flexible workspaces? Is the home distinctive enough to justify its cost? Are buyers paying for rooms they will truly use, or just for square footage that once looked impressive in a listing photo?

These are smarter questions than the market used to ask.

And maybe that is one good thing to come out of a painfully expensive housing era. When money gets tighter, buyers stop getting dazzled so easily by empty excess.

The End Of A Housing Era

The Fox Business discussion between Stuart Varney and Mitch Roschelle did more than spotlight one Zillow headline. It described a market where old assumptions are breaking down.

There are too many agents for too few homes. Sellers are still clinging to inflated price hopes. High earners and cash-heavy buyers are driving much of the serious activity. And at the same time, the oversized suburban showpiece is losing some of its cultural power.

Roschelle’s point about the McMansion era ending is really a point about changing priorities.

People still want homes. They still want comfort, privacy, and space. But they increasingly want homes that reflect how they actually live, not how people imagined they would live 15 years ago.

That is probably overdue.

For a long time, housing sold the fantasy of more: more rooms, more square footage, more extras. What this market seems to be saying now is that buyers are becoming a little more practical, a little more selective, and maybe a little less impressed by sheer size.

And in this economy, that shift feels less like a fad and more like common sense.