https://www.statista.com/statistics/529371/floor-area-size-n...
The average new construction house size changes from 1500 square feet in 1975 to 2500 square feet in 2022.
So yes, some of the higher cost of housing is simply that buyers want more house. I know my personal house is nearly double the size of house I grew up with, despite only having 3 kids vs my parents 2.
There were lots of factors, but basically it comes down to the fact that it's significantly more profitable for builders to build bigger, more expensive houses than smaller, more affordable houses.
AKA, a builder will make much more profit on a single $750K house, than building 3x $250k houses.
So I'm sure the reason houses are getting bigger is some combination of consumers wanting bigger houses, and bigger houses being what's available.
This is also the reason why car buying also sucks so much now. There is more profit it bigger higher trim cars full of features than smaller reliable basic cars.
Starter homes generally just don't get built, as it generally costs more per square foot to build a start home than a larger home (as some of the features are going to mostly cost the same regardless of the floor plan, such as some of the kitchen outfitting). The reduced supply moreover makes it so smaller houses don't even end up costing much less, because there's enough demand for them from people who not only don't need the space, but would prefer not paying the utility bills and dealing with the maintenance.
Is it that buyers are wanting more house or that builders make more profit selling more house due to red tape and zoning?
Each kid gets their own bedroom. A home office. Maybe a movie room.
Compare that to the 1950s boomer house, that has 2 kids in 1 bedroom, and no "extra" rooms.
Perhaps you have them all.
Everywhere else, buyers can only buy what exists. Affordable home buyers buy nothing because there is nothing within reach.
The notion that people would choose detrimental living because they couldn't get a house that was 3x their need seems absurd.
The more likely cause is the reality that new houses cost more than double what they were in the 1980s - adjusting for inflation and comparing for size, amenities and market.
With dropping fertility rates I'm sure there are plenty of people with 1 or even no kids that don't need those rooms. Home office will be entirely domain dependent (I don't see e.g. a couple of dentists needing or wanting a home office).
So the fact that the default house is pretty massive means that all sorts of people are priced out entirely.
Builders want more house. Buyers can't buy what isn't built.