Thinking of living space, I sometimes scale up to larger spaces, because this is the general area that I study, especially how we cognize place and space.
I say emphatically that spaces affect our psyches. And perception and feeling of space does, too. Place and space affect how we identify who we are. And it works obversely, too: Our perception and conception of place and space determine what those places and spaces are. We construct space; it is not "something" that exists unchanged without our construction of it.
The latter is more difficult for us to understand because in ordinary consciousness we think of space as a container (the container theory of space) in which objects and events take place. (Here I go again on the conceptual level. But, theory is needed to explain reality, to place it in context of meaning.) But, there is a great deal of postmodernist thinking which sees space as not absolute--a preexisting thing--but as social and mental construction. This says that we construct ideas of place and space, as society (e.g. the Frontier Thesis) and as individuals. Some people, for example, require a home of cozy sparseness (or sparse coziness); others have other spatial preferences.
It's interesting to think about the role our childhood home has as a template for what we now in adulthood perceive as the spatiality in which we are most comfortable. In the childhood home, inhabited space transcends its geometrical space and becomes a place--a trellis--upon which we construct something of our conception of the larger universe. After all, the childhood home is the place of our first universe; it was the only space that we knew.
Incidentally, my childhood home was filled with stacks of newspapers. In the house of my psyche, I've been stacking up the "newspapers" ever since!