When I grew up there were five of us living in a home that was around 1,000 sq. feet; which equates to 200 sq. feet per person. We even had a wood stove which certainly isn’t common these days nor even when I grew up. Our living room and kitchen weren’t too bad but the size of our bedrooms and our one bathroom were amazingly small.
I do agree with foreigners that the size of homes in the U.S. are much larger than they need to be. An average family these days has around 600 sq. feet per person which is three times what I had growing up. Where I live there are housing developments where each person averages 1,500 square feet which is like having a house per family member.
I think of this topic just like I do with automobiles; there’s prestige with owning a large home. Throughout the history of mankind we’ve always had a need to show we’re doing well. I don’t have a problem with this as long as people are living within their means. Meaning someone could own a 6,000 square foot home and the mortgage is only 25% of their take-home pay whereas someone could own a 2,000 square foot home and it is 35% of their take-home pay so he’s the one living paycheck to paycheck. Since none of us knows a person’s financial situation we shouldn’t look at someone living in a large home and think negatively of them.
From a financial perspective a person is better off keeping their mortgage amount around 25% or less of take-home pay. There are several reasons for this: 1) It can help alleviate a lot of stress by softening your monthly bills. 2) It can free up cash flow in case of an emergency. 3) It can earn you more revenue by placing the freed up cash in an account where you could make some money off of it. With what happened in the housing bubble people could’ve made a lot more money if their cash wasn’t’ tied up in their home.
As with everything else it’s a choice we make as to how we live our lives and how we manage our money so it's certainly your call and no one should begrudge you regardless of the decision you make. I guarantee you though that if you're pretty much living paycheck because of your high mortgage payment, life will be much more enjoyable if you move to a home that won't stress you out as much.