Someone’s overlooking the low low cost of buying a house back then. Essentially 2 years of salary. Housing where I live is now 20 years of median salary and about 19 years of average salary, and far more once you consider a loan.
Didn’t overlook it, I simply didn’t comment on it. You also have to be careful about comparing where you personally live and the national average. Because the national average includes a lot of places that are shockingly poor.
Median price of a (not new construction) house in the US as of November 2023 is 387k. Using the $3900 in the OP, that’s about 83k today. The average home price in 2023 is apparently 492k. Either way, it’s waaaaay higher than 1938
Okay. Let’s go local on a market. Chose San Antonio because it’s been fairly steady over the years and has a decent cost of living compared to other places…
Average Salary: approx $55,000
Average Home Price: approx $300,000
So you would still need 5.5 years for a home compared to just over 2 years. And that’s assuming the gross, not net and entire paycheck. You can still pick most places in the US that are out in rural nowhere and the inflation is plainly obvious, it’s just the degree may change a bit.
House sizes have also ballooned. The average home size in 1949 was ~900 sq ft, whereas a new home now is ~2500 sq ft. It was still cheaper, but those homes prices are for a lot less house than people are imagining.
My relatively small house (~1200 sq ft) was built in 1950 and is currently appraised at $550k, so it’s not just house size. Granted, I live in a highly-desirable west coast city and the lot is worth more than the house itself, but the point remains.
I agree, it’s definitely not just house size. But still, I’m not sure that your one data point anecdote is very meaningful. Desirable areas were more expensive in the 1950s too.
True, however, the concentration of wealth has meant that desirable areas are far more out of reach for the middle class than they were in the 1950s when unionization was at an all-time high and the difference between a highly-educated professional vs a skilled tradesman was more a matter of what kind of car they drove and how big their house was rather than what we see now which is working people being priced out of entire markets.
I got lucky because my wife and I bought our house when the neighborhood we’re in was still seen as the ghetto. We bought it because it was the only thing we could afford and it was relatively close to my wife’s parents, but since then the neighborhood has rapidly gentrified and our property value has gone way up.
This wouldn’t be an issue in a country wherein wealth is not so egregiously concentrated at the top.
That’s a lot of difference, really. Makes me wonder if this is needed, considering that the average household size had decreased from 3.33 in 1960 to 2.51 in 2023
So it was 270 ft²/person or less before, now it’s about 1000 ft²/person
Larger houses are due to many factors. Weren’t a lot of power tools around in 1949, and houses were heated by cast iron radiators and coal burning furnaces.
Yes that’s the point. We’re wealthier and more productive now and can consume some of that extra wealth. I am pointing out that we’re not comparing like for like.
Right now, most people are poorer than their counterparts from fifty years ago.
Take away technological advances like computers and cell phones that that would have occurred anyway and look at things like work hours and quality of life.
Hunter Thompson’s “Hell’s Angels” has a great chapter on the economics of being a biker/hippie/artist circa 1970. An Angel could work six months as a union stevedore and have enough money to hit the road for two years. A part time waitress could support herself and her musician boyfriend.
As late as 1980, ‘middle class’ was defined as one high school graduate supporting a family of four. After three terms of Reaganomics ‘middle class’ was two college grads working full time. Also, $1 million in 1980 was still a vast fortune and nowadays it’s what a rich guy pays for a party.
Someone’s overlooking the low low cost of buying a house back then. Essentially 2 years of salary. Housing where I live is now 20 years of median salary and about 19 years of average salary, and far more once you consider a loan.
Didn’t overlook it, I simply didn’t comment on it. You also have to be careful about comparing where you personally live and the national average. Because the national average includes a lot of places that are shockingly poor.
Median price of a (not new construction) house in the US as of November 2023 is 387k. Using the $3900 in the OP, that’s about 83k today. The average home price in 2023 is apparently 492k. Either way, it’s waaaaay higher than 1938
Okay. Let’s go local on a market. Chose San Antonio because it’s been fairly steady over the years and has a decent cost of living compared to other places…
Average Salary: approx $55,000 Average Home Price: approx $300,000
So you would still need 5.5 years for a home compared to just over 2 years. And that’s assuming the gross, not net and entire paycheck. You can still pick most places in the US that are out in rural nowhere and the inflation is plainly obvious, it’s just the degree may change a bit.
House sizes have also ballooned. The average home size in 1949 was ~900 sq ft, whereas a new home now is ~2500 sq ft. It was still cheaper, but those homes prices are for a lot less house than people are imagining.
My relatively small house (~1200 sq ft) was built in 1950 and is currently appraised at $550k, so it’s not just house size. Granted, I live in a highly-desirable west coast city and the lot is worth more than the house itself, but the point remains.
I agree, it’s definitely not just house size. But still, I’m not sure that your one data point anecdote is very meaningful. Desirable areas were more expensive in the 1950s too.
True, however, the concentration of wealth has meant that desirable areas are far more out of reach for the middle class than they were in the 1950s when unionization was at an all-time high and the difference between a highly-educated professional vs a skilled tradesman was more a matter of what kind of car they drove and how big their house was rather than what we see now which is working people being priced out of entire markets.
I got lucky because my wife and I bought our house when the neighborhood we’re in was still seen as the ghetto. We bought it because it was the only thing we could afford and it was relatively close to my wife’s parents, but since then the neighborhood has rapidly gentrified and our property value has gone way up.
This wouldn’t be an issue in a country wherein wealth is not so egregiously concentrated at the top.
Not to mention changes in wiring, plumbing, materials, insulation, engineering, finishes, appliances, etc.
That’s a lot of difference, really. Makes me wonder if this is needed, considering that the average household size had decreased from 3.33 in 1960 to 2.51 in 2023
So it was 270 ft²/person or less before, now it’s about 1000 ft²/person
Larger houses are due to many factors. Weren’t a lot of power tools around in 1949, and houses were heated by cast iron radiators and coal burning furnaces.
Yes that’s the point. We’re wealthier and more productive now and can consume some of that extra wealth. I am pointing out that we’re not comparing like for like.
Right now, most people are poorer than their counterparts from fifty years ago.
Take away technological advances like computers and cell phones that that would have occurred anyway and look at things like work hours and quality of life.
Hunter Thompson’s “Hell’s Angels” has a great chapter on the economics of being a biker/hippie/artist circa 1970. An Angel could work six months as a union stevedore and have enough money to hit the road for two years. A part time waitress could support herself and her musician boyfriend.
As late as 1980, ‘middle class’ was defined as one high school graduate supporting a family of four. After three terms of Reaganomics ‘middle class’ was two college grads working full time. Also, $1 million in 1980 was still a vast fortune and nowadays it’s what a rich guy pays for a party.