It has to do with sensory adaptation. That's the scientific way to say that you just get used to it. And it's more pronounced for our sense of smell than for any other sense, like our hearing, for instance. Researcher Pamela Dalton at the Monell Chemical Senses Center has done a lot of work on sensory adaptation. She and her team say that adaptation means you respond less when a stimulus is repeated. So when you're at home, the smell of your house is all around you. It never goes away. It's not just repeated — you're swimming in it. So you become adapted to the way it smells.
The thing with smell, though, is that you adapt to odors really quickly. After "even a few breaths" of a smell, Dalton says, you begin to acclimate to it. You start to experience that smell as being less intense and eventually take no note of it at all. That's why you can smell your friend's house when you walk in, but you don't really notice it the entire time you're there.
Being able to detect smells is important. It might signal danger, like an approaching tiger or a poison in your goblet. Or it might signal something pleasant, like that fresh bread or that bouquet of flowers. Once you've decided against drinking the poisoned wine or eaten the delicious bread, you don't need that signal communicating urgently with your brain anymore. Instead, your nose can stay on the lookout (smellout?) for new smells that are dangerous or delicious.
