The housing market has been severely distorted since at least the 1990s as political pressure to expand lending and reduce interest rates led to greater and greater speculation, too. Developers approved for more money wanted to get the most bang for the buck and built bigger and bigger houses with cheaper and cheaper materials, leading to HOAs full of McMansions that often became maintenance nightmares.

When I was a draftsman before the 2007/2008 housing collapse really hit home here, I know clients were always focused more on "how big can we build it" instead of "what do we really need, and how can it be done most efficiently." All the serious architects and remodelers wanted to encourage people to think smaller and build better, but sheer square footage bragging rights were still the mindset during the bubble, and became the focus for politicians planning a "recovery" to reinflate it.

But yeah, cheap Chinese crap giving an illusion of prosperity by way of quantities of crap sure boosted the sense for buyers that more space was needed. I grew up in 3-bedroom midwest ranch houses with unfinished basements, and some family friends lived in small farmhouses somewhere around 1200 square feet with a single bathroom, and that was normal.