The size of flag that you use will be determined mostly by the flagpole that you install outside your house. A tiny flag on top of a huge flagpole looks ridiculous while a large flag on a short one will not be high enough to get enough wind to fly properly.
In addition, some flagpoles are only rated for flags up to a certain size. A thin and flimsy flagpole in a high wind area with a large flag may have too much stress put on it.
Review your flagpole documentation before choosing a flag.
Flagpole and Flag Size Restrictions
Before you put any flagpole or flag up, check with your local city office. Most cities have restrictions on the height of any object that people are allowed to put up on residential property, and there may be rules regarding the size of flags due to the amount of visibility that a large flag can obstruct.
If you have a neighborhood organization, you should also consult with them before you put anything up because they may also have agreements as to the size and height of flags in the neighborhood.
Length to Height Ratio
A good rule to use is to fly a flag that is approximately as long as a quarter of the height of your flagpole. For example, on a 26-foot flagpole, a good flag option would be a flag that measures 4 feet high by 6 feet feet long.
These rules apply to flagpoles that are in the ground. If you have a flagpole attached to the house itself somewhere, try a relatively small flag, such as the 4-foot long models.
As long as they are not interfering with neighbor's visibility or breaking any local laws, people are free to fly any size flag they choose. However, the standard flag size is 3-feet high by 5-feet wide.
Any flag that you buy that is labeled for home use will likely be this size unless it is specifically marked as being larger or smaller.