I believe that actually further dissuades house use.
Buy something, that for most casual players, very expensive that you can very readily lose if you decide to take a break for whatever reason (besides wanting to take a break because maybe you were burnt out or playing something else at the time there is of course just life being life, covid, job, natural disaster, etc - which SE tries to help with but they can't fully because it would mean locking houses).
Added with other reasons of course like the system doesn't flow very smoothly. like if the system started you out either massively tiny but free but then pointed you towards upgrading that to apartment scale, then to small, etc, etc (location theme also being like this in terms of smoother far friendlier transitions)- meanwhile the game wont threaten to remove progress either. I strongly believe people would more eagerly interact with the system then. At first maybe just because they can store seasonals, but each time you get in it would be like "how about that extra space.. eh? you want a garden don't you, it's right here just press upgrade ;3".
Instead we have situations where people are actively told to buy houses they don't want just so they can then later pay more to get the house they actually did want. Freaking what? It actually works, but seriously that's the way that is a "good way" to interact with the system? It's awful.