Is there a site, book, or paper written comparing the inflation adjusted price of homes from the current time - 2015 - to the past relative the value the home offers, such as size and amenities.

Example: the median price of homes in the 1970s was $24,000. The median home price now is $190,000. Sounds like an opportunity for Americans to complain!

... but wait: what was the size and amenities of the 1970 home vs the 2015 home? Unless we can apply ceteris paribus, we might be comparing granny smith apples to honey crisp apples.

  • 2
    I think I know what you are looking for. Much of the data is based on median home sale price. I don't believe it's adjusted for the long term slow increase in size or the amenities that one expects in today's houses vs those from decades ago. eg, I am showing a house built in 1960, no central AC which new homes are almost sure to have. Nov 9, 2015 at 15:34
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    This is what makes measuring inflation hard.
    – Alec Teal
    Nov 9, 2015 at 18:27

2 Answers 2


Statistics exist. As you said, true comparables are extremely hard to establish, not least because neighborhoods and their surroundings, and what consumers are looking for, can change repeatedly. Construction methods and prices have also changed.

There was also at least one period of high inflation in there. For comparison, a candy bar that cost 15 cents in 1970 can cost a dollar today.

We have also gone through housing boom and bust cycles, one of those quite recently.

Put those and other factors together, and I really don't think your numbers say what you think they say. You're assuming greater rationality and predictability than is actually present.

  • I really don't think your numbers say what you think they say I don't assume or think they say anything and you're missing the point of the question. I am only interested in what data show, not whether it points one direction or another. I am sure that I am not the only person who's ever thought of this question, so I'm sure someone's attempted an answer at it, even if the answer is imperfect.
    – DoubleVu
    Nov 9, 2015 at 14:18

Since no one seems to have an answer, or attempted answer - which I realize no perfect comparison exists - I did find some interesting information and ask a few of my friends in real estate to do a couple of comparisons. Yes, from the data I gathered, houses have risen in price. Of course, according to the government itself, incomes haven't stagnated since 1969, like I see claimed a lot, so a rise in housing prices comparing what we can compare, may not be unthinkable (plus, the US has grown as a population, so this is expected too). According to the government, household median income in 1969 was $8,486 and household median income for last year was $53,657. Even accounting for inflation, that's not a stagnated income.

For homes, AEI looks at square footage only and it tells an interesting story. Unfortunately, we don't actually know what the median square footage size of a home in the United States was in 1970, as we know in 1973 it was 1,525 square feet. According to the latest data I could find, the median home size now is 2,453 square feet.

Comparing amenities is a little more arduous to do and at this moment, I don't see anyone who's attempted to do it, nor can I. What is the value of having central air as opposed to a water cooler? So, I called some real estate buddies and asked, "Generally, if I compare a house that is 50% smaller than the median home size in an area, what is the price range as a percent of the median home size that I can expect." I'm looking at homes in the 1226 square foot range here, one half of what the current size.

Unfortunately, the answer is "it ranges" and the range is about 30-60% cheaper. I'll take the median value here - 45% cheaper. If the median home cost in the United State is $191,000, then 65% of that price is $124,150. That means if I assume that the median home size by square footage since 1970 doubled in value, and I compare what Americans wanted then in size to the same size now (even AEI points out that households have declined in size - the biggest LOL of all, but that means that even if the median home size hasn't doubled in square foot, per person, the square footage size of a median home has exceeded doubling), then:

Same square footage comparison

1970 home price: $24,000 
2015 home price: $124,150

I'm going to estimate that incomes increased from 1969 to 1970 from $8,486 to $9,500 but I have no evidence of this - and all of the links from Google are just "loading" at this moment, so I can adjust the numbers later:

1970 estimated median household income: $9,500
2014 median household income: $53,657

Based on my comparison here - looking exclusively at square footage - the cost of a home from 1970 to 2014 has risen 5.1729 times in value, and median household income has risen 5.6481 times in value.

This, of course, does not include any possible amenity upgrades or downgrades.

Edit: You're free to draw your own conclusions and I realize in this hyper-pundit age, most will. I am simply reporting numbers I collected and find them interesting.

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    so you're saying that house prices broadly inflated at the same rate as household income?
    – MD-Tech
    Nov 10, 2015 at 13:56

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