Less area means less sources of interference for others (this property is also true in the other direction). So the attenuation reduces the signal area, and stronger attenuation lets the transmitter be "strong" in the house without the downsides in congested areas.

Don't need to fight for spectrum with the neighbors.

Small houses don't need a signal that travel through many walls. Probably no roof and floor too. So you can trade speed for range and have no overlaps with neighbors.

Instead large houses need signals that go through roofs, floors and walls. But they probably also have a lot of family members inside, each one with their one, two or three wifi devices that interfere with the rest of the family. Maybe one repeater per room and 5 or 6 GHz would be good there too. 3 different video streams to people of the same couch could still be challenging.

Imagine sharing the spectrum in an apartment in a high population density city.