If you question is "why would people want a smaller house in a city rather than a giant house in a different city", then there are all sorts of answers: 1) Big

If you question is "why would people want a smaller house in a city rather than a giant house in a different city", then there are all sorts of answers: 1) Bigger cities have more and better things to do. Sports teams, theaters (both local and touring professional), concerts, bars, parks. Faster access to a major airport makes travel easier and cheaper. 2) More space isn't always better. More space means more to clean and heat. It's also an excuse to fill with more junk you don't necessarily need. If you added another room or two to my house, I have a good idea of the kinds of things I would fill them with - but my life has been fine for 5+ years without those things. 3) It's feasible to work in an expensive city while maxing out your retirement savings and go live somewhere cheaper later. It's impossible to do the opposite. It gives you choices. 4) The local populace in many of those areas can be unwelcoming if you're anything other than a white heterosexual. Even if you find a neighborhood that tolerates you, your state government is gerrymandered by people who go around vocally wishing you were dead. That turns away a lot of people. I grew up in Michigan, I still have family in Michigan, and I visit regularly enough to be quite certain I never want to move back there regardless of if its cheaper.