[reflexive]

That's true but Europe is full of large houses that are hundreds of years old, so there isn't as much need for new building. Plus if you look at neighborhoods in say, Belgium or the Netherlands, people value (ahem) architectural conformity quite a bit more, as opposed to individual taste.

[sotojuan]

There's a ton of space in the US between the coasts[1], so people have become accustomed to large houses that they can make "their own", so to speak. It's just a different culture.

[1] A lot of it is still unused! My hometown in Texas has actually "grown" in the past ten years towards unused land to build new neighborhoods and schools. I can't imagine that there's large amounts of land in Europe to build entire new communities, right?