Maybe it helps that 50 years ago people could actually afford to buy things like big houses where to throw parties at.
You don’t need a big house to throw a party. After divorce I decided to relive my teenage years and thrown many parties in a 40m2 apartment. You can easily fit 30 or more people in.
Were houses that much bigger in the 1970s, though? Families definitely were bigger, so there were more people per square meter. I think overall, it's a sociological change, not a financial one. People are just less into hosting parties; too much hassle of cleaning up & preparing food, too many online distractions, etc.
Take a look at this graph https://www.aei.org/wp-content/uploads/2016/06/housing1.png?...