But interest rates have dropped from 8% for a 30 year mortgage in 1973 to 4% now. Ignoring down payments, because I’m lazy, that 1973 house took 28.2% of the median income to pay for it. The 2017 house takes 32.2%. Not that big of increase. Now compare the square footage of the two eras’ houses.
In 1973 working Americans were still able to do that on one income. Just try that today.
Square footage is +50% vs 1973, plus today’s homes have Central AC, granite counter tops, hardwood floors, wiring for cable, and many other luxuries that were not common or around in 1973. The median home price sale is skewed also by two factors - 1) New homes are ONLY being built at the upper middle class price point and above - very, very few builders are messing around with starter homes due to the lower margins and 2) Significantly large number of transactions in California, NE and markets like South Florida that have skyrocketed since the early 1970s. The estimated median home value in the US today is only like $200-$225k, not the > $300k this article sites, which is a much closer income to price ratio, not even counting the extra sq ft and nicer amenities.