Average cost of American home decade you were born

[MaxPC]

This sparked my attention after reading about Robert's renovations.
Average cost of an American home in the decade you were born

[Ken]

It isn't a very meaningful comparison because the average new home sold in 1950 or 1960 is completely different from the average new home sold today.

Here is how the average new home size and household size has changed since 1973



And here is how much the average home size and square foot per person has increased since 1920



And in percentage terms



The average American has more than 4x the living space today as someone in 1920. And that doesn't even get into all the additional things that are included in today's homes that were not back in 1920s or 1950s such as air conditioning, lots of appliances, 5x the amount of wiring, central and HVAC, thermal pane windows and insulation, 2-car garages, and more lavish finishes such as granite and stainless steel rather than Formica and linoleum.

We could build modest 1000 sf homes like we used to do a century ago with no insulation or modern appliances, no garage, no HVAC, minimal wiring and plumbing, and basic surfaces. And the inflation-adjusted cost would be much closer to what homes used to cost a century ago.

[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. (Of course, other than the microwave, which is generally now a built-in, the cabinet space is the main determiner in the different square foot costs.) 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.

[Josh]

It isn't a very meaningful comparison because the average new home sold in 1950 or 1960 is completely different from the average new home sold today.

And yet they are quite similar: they both provided a place for someone to live. They also had the exact same essentials, such as providing shelter from the elements, heat in winter, indoor plumbing, and so on.

We could build modest 1000 sf homes like we used to do a century ago with no insulation or modern appliances, no garage, no HVAC, minimal wiring and plumbing, and basic surfaces. And the inflation-adjusted cost would be much closer to what homes used to cost a century ago.

I'm pretty sure homes in 1950 had HVAC. I've lived in houses built in the 19th century, and they had HV, at least.

[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.

[Soloist]

I was talking to someone from Indonesia the other day… a month’s wages for a 50lb bag of rice. A year’s salary for a teacher is less then a month of my wages.

[Josh]

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.

Now compare the cost of a home in a city centre in Germany (there aren't many cities in America that really are like European cities; NYC would be one of them) versus one in a city centre in America.

[Ken]

It isn't a very meaningful comparison because the average new home sold in 1950 or 1960 is completely different from the average new home sold today.

And yet they are quite similar: they both provided a place for someone to live. They also had the exact same essentials, such as providing shelter from the elements, heat in winter, indoor plumbing, and so on.

We could build modest 1000 sf homes like we used to do a century ago with no insulation or modern appliances, no garage, no HVAC, minimal wiring and plumbing, and basic surfaces. And the inflation-adjusted cost would be much closer to what homes used to cost a century ago.

I'm pretty sure homes in 1950 had HVAC. I've lived in houses built in the 19th century, and they had HV, at least.

HVAC as in a combined central AC and furnace system with ductwork to every room in the house. The house I lived in during the 1960s had an old fashioned hot water radiator that ran off a coal boiler in the basement. And the one we lived in during the 1970s had electric baseboard heaters. Neither of them had central AC or heat.

One of the main reasons why a home built in 2020 costs so much more than one built in 1920 or 1950 is because they include so many expensive items that were not considered essentials in 1920, and in some cases were not even imagined.

[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.

[Ken]

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.

Now compare the cost of a home in a city centre in Germany (there aren't many cities in America that really are like European cities; NYC would be one of them) versus one in a city centre in America.

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.