Average cost of American home decade you were born

[Josh]

That is easy enough to do. Most people rent rather than buy in Germany because the government hasn't subsidized single family home ownership like it does here with mortgage interest deductions, subsidized mortgages, and subsidized suburban sprawl. But we can do a housing cost comparison between two roughly equivalent cities that aren't international capitals or some such. For example, here is Hamburg compared to Chicago: https://www.numbeo.com/cost-of-living/c ... cago%2C+IL and it turns out that the cost of housing is more than double in Chicago. Feel free to pick your own city pairs.

Most people in NYC also rent rather than buy.

[Neto]

I started off to try to find these two numbers for a specified year:
Average home size in square footage
Average cost per square foot construction cost

But even this would be misleading, because just like with vehicles, there is a whole lot of 'stuff' built into homes now that was not included back in the decade I was born. I forget the percentage, but I heard once what percentage of the total new home cost is for just the kitchen. Back in the mid 50's (the decade I was born) a kitchen was small -- not all of those separate gadgets to do every individual thing, like a coffee make instead of just a coffee pot, and rice cooker instead of just a pot with a lid, a microwave instead of patience, Do I need to continue? AND, don't forget all of the additional cabinet space needed to store all of that junk. By the way, the house we lived in (built early 50's) didn't even have a bathroom until around 1960. (Dad would bring the galvanized bath tub into the kitchen, where my mom would heat water for the Saturday evening need-it-or-not bath time. The rest of the time it hung on a nail on the outside of the house.)

Speaking of cars, my 46 Plymouth 4-door family car sold in November or December of 1946 for a bit over $1,200. I already had a heater installed when I bought it, but that might have been added later, because that was an option back then, like lots of other stuff, like a visor for the front seat passenger.

Americans honestly have no idea how much wealthier we are today than in generations past. Or even in comparison to other places around the world. A few years back we hosted an exchange student from Germany. Whose parents were bankers (mid-level administrator types) and who obviously had enough wealth to send their daughter overseas for a year. She was shocked at how big our house and yard was in Texas and how big all the cars were. And while we had a nice house, it wasn't any sort of McMansion in a gated subdivision or some such. It was pretty median.

Texas is a big place. Everything is bigger in Texas (they always told us Okies). Except for the mosquitoes. I think they are bigger in Minnesota.
All kidding aside, the US covers a huge area, and in comparison to Europe it is largely unsettled. (My impression, obviously, as I've never been to Europe.) I think it is more of a cultural difference than a difference in actual wealth. People put their money where their heart is, and in the States, that is houses and cars. Lots of both. And, BIG. (But in recent decades, not necessarily with much thought of quality, which (again, in my impression) is a cultural value more typical of Europeans than of North Americans. (I'm including both the States & Canada in this, excluding Mexico, which is also North America.)

[Josh]

Obviously, the fact that homes are larger are part of the reason for the increase. But not all.

The largest jump occurred at the end of the decade as prices reached $74,200 in 1979, or $313,506.24 in today's inflation-adjusted dollars.

That's the apparent average cost around when I was born.

The median US price last year was $431,000. The typical home value in my state last year was $257,912.

My son just bought a his first home on 3 acres of wooded land for $155,000, needing major structural repairs and major remodeling (rotting floor joists, bad roof, etc). It has 1400 square feet. That's more than double what I paid for my first home, also a fixer upper, 23 years ago. Looks like the average sq. ft in 2023 was around 2,400.

My first home increased 83% in value in 10 years, partly due to property upgrades but also due to inflation in house/land prices.

He got a good deal.

I bought a place with 16 acres of land (land is worth around $7,000 an acre here) for $160,000 with an 880 sq ft house in which both bathrooms were in need of immediate remodelling, with leaky plumbing.

My parents bought a house in a desirable city for $80,000 in 1989 with 1,600 sq ft. That exact same home has had no major additions or changes and is worth around $260 - $300k now. This is in the "rust belt", not exactly a prime area and not a place that people are moving to.

Homebuilders actually do build very basic, small square footage homes like Ken thinks would make housing affordable - except that they aren't very much cheaper. You can get a 1,400 sq ft house on a postage stamp lot from Ryan Homes, but if that's not small enough, you could also just buy a townhouse or an apartment. There are apartments as small as 300 sq ft for sale in places like NYC; here is an example of a 600 sq ft one on the market right now for about $500,000:

[Ken]

I started off to try to find these two numbers for a specified year:
Average home size in square footage
Average cost per square foot construction cost

But even this would be misleading, because just like with vehicles, there is a whole lot of 'stuff' built into homes now that was not included back in the decade I was born. I forget the percentage, but I heard once what percentage of the total new home cost is for just the kitchen. Back in the mid 50's (the decade I was born) a kitchen was small -- not all of those separate gadgets to do every individual thing, like a coffee make instead of just a coffee pot, and rice cooker instead of just a pot with a lid, a microwave instead of patience, Do I need to continue? AND, don't forget all of the additional cabinet space needed to store all of that junk. By the way, the house we lived in (built early 50's) didn't even have a bathroom until around 1960. (Dad would bring the galvanized bath tub into the kitchen, where my mom would heat water for the Saturday evening need-it-or-not bath time. The rest of the time it hung on a nail on the outside of the house.)

Speaking of cars, my 46 Plymouth 4-door family car sold in November or December of 1946 for a bit over $1,200. I already had a heater installed when I bought it, but that might have been added later, because that was an option back then, like lots of other stuff, like a visor for the front seat passenger.

Americans honestly have no idea how much wealthier we are today than in generations past. Or even in comparison to other places around the world. A few years back we hosted an exchange student from Germany. Whose parents were bankers (mid-level administrator types) and who obviously had enough wealth to send their daughter overseas for a year. She was shocked at how big our house and yard was in Texas and how big all the cars were. And while we had a nice house, it wasn't any sort of McMansion in a gated subdivision or some such. It was pretty median.

Texas is a big place. Everything is bigger in Texas (they always told us Okies). Except for the mosquitoes. I think they are bigger in Minnesota.
All kidding aside, the US covers a huge area, and in comparison to Europe it is largely unsettled. (My impression, obviously, as I've never been to Europe.) I think it is more of a cultural difference than a difference in actual wealth. People put their money where their heart is, and in the States, that is houses and cars. Lots of both. And, BIG. (But in recent decades, not necessarily with much thought of quality, which (again, in my impression) is a cultural value more typical of Europeans than of North Americans. (I'm including both the States & Canada in this, excluding Mexico, which is also North America.)

It is both. For example, the median individual wealth in the US is $107,739 and the mean wealth is $551,347. Contrast that to Germany where the median individual wealth is $66,735 and the mean wealth is $256,179. Which means that not only are Americans wealthier than Germans on average, there is also much more income inequality in the US (the top 10% and top 1% are exceedingly more wealthy in the US than Germany).

There are some small countries in Europe like Switzerland and Denmark that have higher median wealth than the US (but not higher mean wealth) but that is largely because those countries lack the vast underclass that is present in the US. They have a lot less poor people.

[Josh]

Comparisons of Europe to America need to include all of Europe to be a fair comparison. Comparing individual countries would be like comparing a specific state to some country in the EU.

[mike]

Obviously, the fact that homes are larger are part of the reason for the increase. But not all.

The largest jump occurred at the end of the decade as prices reached $74,200 in 1979, or $313,506.24 in today's inflation-adjusted dollars.

That's the apparent average cost around when I was born.

The median US price last year was $431,000. The typical home value in my state last year was $257,912.

My son just bought a his first home on 3 acres of wooded land for $155,000, needing major structural repairs and major remodeling (rotting floor joists, bad roof, etc). It has 1400 square feet. That's more than double what I paid for my first home, also a fixer upper, 23 years ago. Looks like the average sq. ft in 2023 was around 2,400.

My first home increased 83% in value in 10 years, partly due to property upgrades but also due to inflation in house/land prices.

He got a good deal.

Only if you don't count the value of the sweat equity going into it now. It was for sale for 8-10 months which is a lifetime in our market. Not too much demand for a ranch house with a bad roof and bad floor joists on steep wooded property on a crawl space. It sold for about $34,000 less than the original asking price, which was also unusual in our market. The steepness of the driveway is a real hazard in winter; we used to sing Christmas carols for the previous resident, and my friend bashed out the rear window of his van sliding backwards down into the woods along the drive.

[Ken]

Comparisons of Europe to America need to include all of Europe to be a fair comparison. Comparing individual countries would be like comparing a specific state to some country in the EU.

If you compare ALL of Europe than the wealth disparity between the US and Europe is far more dramatic. Because you are including countries like Spain, Portugal, Poland, Romania, etc.

North America (Canada/US): Median individual wealth: $108,918 and mean individual wealth: $531,286
Europe: Median individual wealth: $28,611 and mean individual wealth $177,179

Source: https://en.wikipedia.org/wiki/List_of_c ... _per_adult

[MaxPC]

Obviously, the fact that homes are larger are part of the reason for the increase. But not all.

The largest jump occurred at the end of the decade as prices reached $74,200 in 1979, or $313,506.24 in today's inflation-adjusted dollars.

That's the apparent average cost around when I was born.

The median US price last year was $431,000. The typical home value in my state last year was $257,912.

My son just bought a his first home on 3 acres of wooded land for $155,000, needing major structural repairs and major remodeling (rotting floor joists, bad roof, etc). It has 1400 square feet. That's more than double what I paid for my first home, also a fixer upper, 23 years ago. Looks like the average sq. ft in 2023 was around 2,400.

My first home increased 83% in value in 10 years, partly due to property upgrades but also due to inflation in house/land prices.

Indeed. After leaving the road and settling down again we were astounded by the inflation of housing and land prices. We noticed a massive hike in those prices approximately 3 years ago. A local man sold his 15 acres to go into a retirement facility with his wife. The buyer simply painted the house and resold the entire property 6 months later for twice the amount he paid for it. Twice the amount.

Some of the neighbors were upset because they had hoped this buyer would settle in and become a part of the community; instead he turned out to be a flipper.