According to the UK Daily Mail, a tiny house movement is growing among Americans. The average tiny house is 100-400 square feet and is most likely to be purchased by and lived in by those in the millenial age group who do not want to have a 30 year mortgage and retirees who are downsizing.
Now that's downsizing! I'm doubtful most newlyweds in their 20's will still want a tiny house once babies make an appearance. But the architectural feature which helps these tiny homes seem somewhat spacious and not suffocating, is a higher roof line which gives more volumn to the inside. Really, though, living in one of these is for people who do not shop much or have a desire to have things because there just isn't room.
Also, these may be more suitable as vacation homes set on a lot by a lake or some such.
At the link there is a video tour of one of the houses.