Why Do People Build Larger Houses Than They Can Afford or Need?

I am a civil engineer and love everything about engineering and architecture. I love watching shows about the construction of family houses. One of my favourites is Grand Designs, where Kevin McCloud, the author of this British show, presents people and their dream houses mostly built by their owners, who had zero experience in construction. Despite their lack of experience, those self-builders created truly unique houses from both aspects of architecture and engineering.

Kevin follows every step of the construction from planning to realization. Each story is about owners’ trials and tribulations along the way.

But for some of them, building their phantasy home turned into nightmares, left them in huge debts and broken relationships, and even tore families apart.

Watching people struggle with financing the construction of their homes, I often ask myself the question in the title.

Why do people build houses larger than they can afford?

I remember an answer to that question when Kevin McCloud asked a couple whose marriage broke down because of the pretentious project that has driven them deep into debt:

People will do whatever they can to fulfill their dreams. 

Yes, but at a cost. Is a desire to build a bigger house than you can afford worth giving everything you earn to pay off loans and multiple mortgages for decades?

I would not do that to my family. We all have dreams and desires, but I would never embark on construction with a budget I cannot afford without compromising the quality of life of my family.

As someone whose job is to supervise and manage construction projects, I know well that cost estimation is most important in managing every construction project. A project budget should be based on completed drawings and accurate specifications. Besides, you need to provide additional funds for unforeseen costs that almost always crop up.

Amaze me that people start spending money on their projects having nothing more than desire and determination (and underestimated budget).

To me, it looks like letting good luck and ‘higher power’ take the steering wheel of your life, while hoping for the best.

Again, I would not do that. Both are too unpredictable. But that’s just me.

Why do people build larger houses than they need?

There is no one-size house that fits all. I’m not advocating for living in tiny houses, but what would be the purpose of wanting a house much larger than you and your family need.

Consumerism and the dogged pursuit of ‘more’ is deeply embedded in the contemporary world. It is a way our society functions, and the economy grows. The truth is that many of the things we want have little or no relevance to our physical or spiritual well-being.

Some studies about the relationship between the size of living space and subjective well-being have shown that moving to larger accommodation had a weak positive effect on the life satisfaction of research participants, which lasted for 6 months only.

People lived just fine in houses almost twice as small as today, only 50 years ago. At the same time, the household size in most European countries decreased almost twice.

Answers such as, I deserve a bigger house because I work hard and can afford it, were often heard when Kevin McCloud asked couples who wanted to build over-sized and luxurious houses. A couple from the other show I watched recently built their dream house of 800 square meters (more than 8,500 square feet). At the time, they had no kids, only two dogs.

Do we really need everything we desire? People often confuse desires with needs. Is a desire for a larger house than needed gratifying one’s ego and trying to impress others?

The ego makes us desire more than we already have.

Although desire arises from the need and a sense of lack, it also emanates from greed or even envy (when someone else’s house is larger and more luxurious than yours).

Many couples from the Grand Designs show said that the reason for a larger house is to host extended family and friends. Family and friends are the most important things in our life, but for spending time with them, you do not need to build a house of 800 square meters.

Perhaps the reason is that people who achieved a certain financial comfort level may just want to indulge in luxuries. Maybe it is just about life-is-short-make-the-most-of-it philosophy. Or maybe that some people fill the holes in their lives by building a new, larger home.

In human nature is always to want more. If so, will we ever be truly happy? How much is enough? Often quoted words by Rabbi Hyman Schachtel sound reasonable:

Happiness is not having what you want. It is wanting what you have.

Both are true, but it is important to be aware of the limits to your desires. As I see it, there is no general theory of happiness.

We cannot all follow the example of Ben Law and his cheaply built, self-sufficient eco-lodge in the woods, but his approach to sustainable living is worth considering.

Instead of building a larger and more luxurious house, why not investing in improvements to the existing one. The main function of a house can be fulfilled within smaller footage than you think.

In my opinion, we can live better and happier by consuming less and retaining our possessions longer. But that’s just me. 🙂

What about you?


Lada Prkić
Lada Prkić
Lada Prkić is a Civil Engineer and has a lot of professional experience in various fields of Civil Engineering. She works at the University of Split on the capital construction projects at the University Campus and beyond. Besides performing responsible tasks as a Project Manager, and Head of Capital Investment Office, Lada became passionate about blogging. She writes about civil engineering, architecture, geometry, networks on social media, and human relations. Lada lives with her family in Split, Croatia, a beautiful 2,000 years old city on the coast of the Adriatic sea.

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  1. Such interesting and philosophical questions you raise, Lada.

    My father, may he rest in peace, advocated for “housing above your station, eating below your station, and dressing according to your station”. The argument was that a house was an investment, and by buying a house a little more expensive than you really wanted, you would force yourself to build a nest egg in your house while at the same time getting into areas with better schools and perhaps a better local network. Eventually you could sell your house and “eat the bricks.”
    That, naturally, was a much saner argument when interest rates were low and fixed and the concept of interest-only loans didn’t exist. Refinancing, too many people get caught in a trap of “eating their bricks” long before they retire.

    Other than that, what makes sense in one country may be insane on the other side of the border. Rules for rent increases if you don’t own your home, and for taxation of interest and profit when selling can change what housing options are safe and which lead to exploitation. All that said, nobody needs 800 sqm for two people and two dogs.

    • Thank you for reading and commenting, Charlotte.
      You’re right – what makes sense in one country may be insane for those living on the other side of the world. Some are fascinated with bigness and newness, while others are more content with smaller sizes and investing in improvements to the existing living space.
      I agree that a house or flat is a long-term investment, but many cannot afford those big houses and are actually in debt up to their eyeballs. Banks allow people to borrow more than most are even capable of paying off. And not just in America. People buy more than they need – more of everything.

      Croatian are obsessed with private property. About 85% of households own the house or flat they live in. Owning the land we live in is a primordial urge that seems to be ingrained in our genes. 🙂 Obsession with property is a characteristic of the citizens of Central and Eastern European countries. Apartments and houses are treated both as places to live and as piggy banks. That way, two things are mixed: living and investing. The best-selling are two-bedroom apartments (about 60 square meters in area) with proximity to public transport and accompanying facilities.

      In Croatia, long-term renting is viewed as failing in life. 🙂 My husband and I lived in a rented apartment for eight years before buying the one we live in now. We could buy a house outside the city for the apartment price, but we have chosen to live in the city centre because of the proximity to work and universities. Since we worked as engineers in the Middle East for several years, we didn’t have to take out a bank loan. Numerous Croatian households, and many of our acquaintances and friends, that took Swiss franc-linked loans with the foreign currency (FX) clause faced insurmountable problems with the repayment of their debt after the rise in Swiss franc value against the Croatian kuna, combined with high-interest rates. We witnessed the destructive impact of debt on the lives of our friends and their families.

  2. I believe some people will actually sacrifice common sense in order provide the best environment for their families. They may want ample space for privacy, safety and comfort. They view a large home as an investment and will risk debt in the hopes that they can dig themselves out of hardship later. Mindset: I’d rather go into debt to provide this spacious home for my family instead of throwing money away on a lousy apartment filled with strangers and mice. It’s no different than paying a fortune for a college degree… the payoff will come later once you’ve earned that great job with benefits. Yes, there are some who buy big simply to match their vast ego, but I think the prevailing wisdom for most home owners is that you only live once, so let’s roll the dice and see if we can make our dreams happen here, debt and common sense be damned… Interesting article Lada. Keep writing these thought-provoking pieces. I really enjoy them… 🙏

    • Thank you, Aaron, I’ll keep writing. 🙂 Obviously, the size of the house matters depends on the country you live in. 🙂 I believe there’s a big difference between Europeans and Americans in terms of home size. I read many articles about why American houses are so big and think that what people consider adequate depends on their context. The environment in which we live shapes our attitudes. We live in an 800 sq feet apartment, full of light and with the gorgeous view of the Adriatic sea and islands near Split, my hometown. There are no mice. :-))
      I can’t afford a big house without a decades-long loan. Would rather live a debt-free life and spend money on other “silly needs.” For now, we are happy living in our apartment.

  3. Excellent view on folk seemingly needing big houses. Kevin McCloud is excellent. I always watch his series. Some folk just want a BIG HOUSE. Fine if they can really afford it; won the lottery…up to them.
    First of all, I would see how much I wanted to/can afford to purchase a house. Then it is location, location. location! Familiar!? Right now my house is not that big; it’s in a small close (no driving through) everyone is friendly and we all look out for each other. It is within twenty-five minutes walk from Winchester, and surrounded by glorious countryside. I agree, better to invest money in adding facilities than moving for the sake of it.

    In Winchester there are modest apartments that sell for over one million UK pounds. A buyer would spend money locally, use the restaurants, pay local rates and essentially ‘give’ to the community.

    Good view and good advice, Lada.

    • Thank you, Simon. I’m glad that you also watch Grand Designs and Kevin McCloud.
      I always say, to each their own. There’s nothing wrong with building a new house if it’s important to you and won’t leave you in debt. I would rather live a debt-free life. 🙂
      I was just trying to understand what makes people desire to build a house they cannot afford. It is hard to explain human nature.
      Thank you again for commenting here and on LinkedIn.