Discovering where your ancestors lived is important, but it may be just as important to discover how they lived. In the past, as in the present, there are great disparities in the lifestyle of the different social and economic classes. Your ancestors may have been so poor, they lived in debtors prison or in the poor house. But they may have been wealthy and had farms and businesses. You may even find you are related to royalty (But I wouldn't count on it. There were a whole lot more poor people than rich people).
So how do you find out about the economic status of your ancestors? There are direct methods, such as estate inventories taken at the time of death and such as viewing the value place on the ancestor's real property for tax purposes. There are also indirect methods, looking at the valuation and ownership in the U.S. Census or similar records. It also helps to read any local histories. More prominent (i.e. rich) families seem to get mentioned more often than the poor ones. Perhaps because they were the ones paying for the writing of the book.
As I began to do research about my own maternal grandfather, over time I learned that he and his family lived in a series of homes, mostly rented. On at least one occasion, they lost their home to a foreclosure. This understanding came through researching original records, because no one in family ever mentioned financial difficulties.
So what does it matter? It matters the most when you are looking for records, for example, the difference between looking in Who's Who in America or the Poor House records. Of course, you may want to look both places. You know, hope springs eternal that you are related to some wealthy ancestor! But realistically, the types of records you research and their availability, depend to a great extent on the social and economic prominence (or lack thereof) of the ancestor and his or her family. Face it, rich people generate more records (paper) than poorer people.
But on the other hand, you also need a sense of place. Your ancestors may have been poor from our standards, but they may not have been any worse off than everyone else in their community. Poor and rich are highly relative. You must also be aware of the greater community. This is what I call a sense of place. Where your family lived in the community may tell you a lot about what kinds of records they may have left to posterity. Think about it, you know where the "rich folks" live in your town or community and just a certainly, you know where the poor people live.
Next, I will discuss some the ways to find out and obtain a sense of place.