Houses are only getting larger for (often enormous) suburban houses in new developments, not for apartments or redeveloped houses in existing neighborhoods.

The pressure against urbanization is going to continue growing as long as the quality of life (esp apartment size) decreases in urbanized areas.

I have lived in a few excellent urban neighborhoods with very strange demographics resulting from the lack of variety in housing sizes. You saw very many young people and a lesser but solid presence of long-present middle age to elderly people but no families with children older than a year or two.

The neighborhoods were very livable until you had children and needed space, then you either had to be earning way above average salary or live packed in like sardines because the fancy new construction was only small apartments.