Where exactly was Jesus born? According to Luke 2:7, Mary gave birth to Jesus in a ‘katalyma,’ which literally means ‘lodging place.’ Traditionally, we’ve translated that word as ‘inn’ and imagined it as a sort of ancient Best Western. There’s actually a different Greek word for that sort of ‘inn’ – not ‘katalyma’ - and so Luke has really only told us that Jesus was born in a ‘lodging place’ or ‘place of temporary refuge.’ (He uses this same word in Luke 22:11 to describe the room where Jesus and the disciples celebrate the Last Supper).
The fact that there was a manger on hand implies that this ‘temporary lodging place’ was normally home to animals, but even then, we’re not talking about a barn or stable in the 21st century sense of the word. It may have been a cave as later tradition suggests, or even a small enclosure within a house.
Since there was no room in the ‘lodging place,’ I’m going to assume that it was not improvised, like a cave, but instead, a place where many people commonly paid for a night’s lodging and that night, there was no room left. On Christmas Eve though, some innkeeper allowed Mary and Joseph into his own quarters, allowing them to take the last space in the house, namely the place where his animals were kept (which could very well have been an enclosure in his living room) and it was there that Jesus was born. That is why our ‘innkeeper’ on Christmas eve may not be like what you’re used to.