US house prices in 1950 vs. 2024, accounting for inflation

Original Article ↗ Hacker News Discussion ↗

Price-to-income, inflation, and metrics

  • Many argue CPI-adjusted prices are misleading; price-to-median-income is seen as more relevant for affordability.
  • Shared FRED data suggests US median house price to family income rose from ~2.9 (1963) to ~4.3 (2003).
  • Some claim median income has risen faster than CPI, so typical households may spend a smaller income share on housing vs 1950; others dispute this or focus on local crises.
  • Debate over which benchmark to use: CPI vs money supply (M2) vs incomes. One view: relative to M2, real house prices may be flat or slightly down, with affordability issues driven by stagnant/declining real incomes and debt.

Housing quality, size, and safety

  • Repeated reminders that 1950 housing stock was smaller, often lacked indoor plumbing, insulation, modern wiring, and safety features.
  • Houses today are much larger on average, and per-person space is often higher; some argue this alone can explain a chunk of the price increase.
  • Others counter that build quality is often poor, finishes are cosmetic, and size/amenity differences cannot justify 3–5× real price jumps.
  • Building codes, safety requirements, and improved construction practices (fewer occupational deaths, fewer fires) are cited as real cost drivers.

Land, zoning, and density

  • Strong consensus that land, not structure, is the main cost driver in hot markets.
  • Zoning restrictions (single-family only, anti–multifamily, height limits) are blamed for constraining supply and encouraging “big luxury per lot” rather than smaller, cheaper units.
  • Upzoning, “missing middle” housing, and mass transit integration are repeatedly proposed as solutions.

Supply, demand, and desirability

  • Many see a basic story: more people with higher incomes want to live in a few job-rich, amenity-rich metros; housing supply there is throttled.
  • Discussion notes shifting “desirability” over decades (formerly rural or marginal areas becoming hot suburbs or city cores).

Housing as asset vs shelter

  • Widely shared view that policy has treated housing as an investment vehicle, not a human need:
    • Tax treatment, cheap credit, QE, and investor/hedge fund buying cited as amplifiers.
    • Some argue making housing a “good investment” is inherently incompatible with making it cheap.

Inequality, generations, and policy ideas

  • Rising income/wealth inequality and two-income households are linked to higher prices and entry barriers for younger cohorts.
  • Ideas floated: restrict corporate/hedge-fund SFH ownership, tax multiple homes more, public/social housing, equity-sharing for renters, remote work rights, and major zoning reform.
  • Whether a major price “correction” is likely is contested; some expect a slow adjustment constrained by structural shortages and labor limits.