First off, welcome to the forums
I would say that it is completely up to you. a 7x4 space would be better for an N scale layout, but if you plan to expand in the future, you do HO.
I myself an am HO'er, but ive done work in N as well for a Steel Mill. Im quit young (19) as im assuming you are since you said you have not graduated yet. There are a couple things to think about:
**Will you be able to take this with you when you move out? (im assuming you havnt moved out of your parents house yet cuz neither have i lol)
**Can you work in N scale? Its a small scale, and not everyone can handle the small parts and such of building and maintaining an N scale layout. N scale is fun tho i have to admit, and you can really get a LARGE empire in a small space if you try hard lol
**Will you be getting a job? Both scales require alot of money lol. HO scale you can pick up some cheap stuff, but alot of it will be older equipment from the 70-90's. Both N and HO are about the same prices for stuff. There certainly is a little more available for us HO'ers then there is for N scalers
Really its all a matter of personal choice and the space you have available for a practical and operating layout. You dont wanna cram to much into a small space, in other words, you dont want a spaghetti bowl of tracks.... For one thats just way to much money in track and turnouts, and two, it wont look so good
Era of modeling also plays a role, do you have in mind what you want to model? Steam ere, early diesels, or modern? What road names do you want to have? I model BNSF, UP and a little CSX, as well as CNW, BN, and SP (all owned by BNSF or UP now)
I hope this gave you a little to think about...