You’ve no doubt heard the conventional wisdom and angst about housing being unaffordable in America. When a chorus on any subject gets too loud, repetitious and unoriginal, it’s time for a counterview.
Compared to 1956, Americans now have 532 more square feet of living space per person, as well as homes packed with 3.7 times more amenities—and all of it purchased for about 24 percent fewer hours of pay per square foot, on average.
That’s the conclusion of an article in the Human Progress newsletter and is similar to the points I made in a recent commentary.
Newsletter excerpt:
Median home size has almost doubled, rising from about 1,150 square feet in 1956 to roughly 2,210 square feet today. Over the same period, average household size has shrunk from 3.3 people to 2.51. The result is a dramatic increase in living space per person—from just 348 square feet in 1956 to about 880 square feet today. That’s 532 more square feet per person, or a 153 percent increase. Had space per person stayed at its 1956 level, the typical home today would measure only about 874 square feet.
The median home cost about $14,500 in 1956—roughly $12.61 per square foot. With average wages at $1.85 an hour, each square foot required 6.82 hours of earning. Today, the median home price is about $420,300, or $190.18 per square foot. However, average wages have risen to $36.53 an hour (before benefits), bringing the time price down to 5.21 hours per square foot. So, while the dollar price per square foot has risen 15-fold, wages have increased nearly 20-fold. The result is the time price of housing has fallen by almost 24 percent.
I would add that many Americans are now spending $1,000 a month on car payments, car insurance, and maintenance for fancy cars and humongous trucks, instead of buying basic transportation for a lot less.
That’s in addition to the $550 they spend per year on streaming services, the $1,556 they spend on food delivery, the $14 per craft cocktail that they consume, and whatever they pay for tattoos, pot, and jeans that come new with rips in them. Also, a family of four will spend $7,422 for a five-day vacation at Disney World.
Anyway, regarding housing affordability, it can vary widely depending on timing, location and tradeoffs. Personal experience makes the point.
When I bought my first house in 1975 in Chicago, mortgage rates were 8.8%, and they were about 13% when I bought my second house in 1982 in bucolic Long Valley, NJ, across the street from a beautiful park and waterfall.
On a wooded one-acre lot, the Long Valley house had a well and a septic tank. I paid $155,000 for it and sold it five years later for about the same price. The 3,248 sq. ft. house is now worth about $600,000.
The uncurious media rarely talks about property taxes, so I will. After our marriage in 1987, Kim and I bought a 2,382 sq. ft. house in Basking Ridge, NJ, which was 20 miles closer to New York City than Long Valley and thus much more expensive. We sold it at a loss four years later, when we moved to Phoenix. Since then, the house has almost doubled in price and is now worth about $850,000. Property taxes are a whopping $18,859 per year.
Kim’s dad lived in the small, close-knit, crime-free, bucolic community of Westline, Penn., about 80 miles southeast of Buffalo. When he passed several years ago, his house sold for $74,000. Property taxes are still almost nil, and the hamlet gets its water from a nearby spring at almost no cost, because community members maintain the system. Some residents heat their homes with wood that they’ve harvested, split and stored.
As I said, affordability depends on timing, location and tradeoffs.
Mr. Cantoni now resides in Tucson and can be reached at [email protected].
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