To study the cognitive role that tangible objects play in design thinking, we gave 17 architects and novice students a set of blocks and asked them to design their dream house. Although the blocks seem simple they are filled with perceptual surprises. We regard manipulating blocks as a form of physical thinking because through interaction designers increase the dimensionality of their design space. This happens because a) perceptual ambiguity leads to multiple semantics - multiple ways of identifying what shapes are out there, and b) kinesthetic and other forms of non-visual interaction enables designers to feel inertia, mass, force and gravity and thereby encounter blocks and their relations in additional ways. The effects of tangibility and enactive forms of perception is that the design space expands, often leading architects to more divergent thinking. Physical interaction broadens the basis of creativity.