I'd love it villagers could get house upgrades too. It would be great to see them evolve with the town, in a sense, and it would be less sad when they tell me they wish they had enough money to have a bigger house like the player character's.
I'd like to see more growth in their personalities and your relationship with them as well. I think that's an addition they could build into the next game and stay true to the concept . I also love the idea of expanding the villagers homes! Gives them more personality
It would be nice if the villagers would be more likely to stay as their house gets bigger and bigger, that way you have your favorites as more permanent.
I would like the idea though. It would at least make it feel like the villagers are doing something with their lives rather than pottering about like inept morons waiting for me to do everything.
I hope not. I think that villagers could expand their house the longer they stayed in your town, but still leave. I wouldn't want this to make them less likely to leave, because while I understand that people would like to keep specific villagers from moving (and I'd love a better system for that, myself), it could be fun to keep villagers long enough to see their completed houses before sending them on their way. Maybe that's just me, though, I sometimes like to change the villagers I have that aren't permanent residents even when they've been with me a long time.