When I relocated my home and business to another state during COVID I ended up buying a bigger home in my subdivision than I really needed. This was mainly because the bigger home just happened to be the one whose owner accepted my offer after 5-6 unsuccessful offers on other homes. But one thing that stood out in my mind was that a “large” home in this neighborhood only cost about 7% more than an “average” home.
You’ll probably find that for new construction, many of the costs are fixed no matter how large or small the house is — like sewer lines, electrical connections, building permits, two-car garage, patios or decks, etc.