How Much Home People Are Getting For Their Money Compared To The Past


Home affordability has been a popular topic for the past few years as prices rose and interest rates shot up. First-time homebuyers have complained that they need to spend more to get less than their parents did and industry leaders say they are somewhat right.

Andrew Lokenauth, publisher of, said that last year the median home price was $428,700 and that with a 20% down payment of $85,740, the mortgage amount would be $342,960. This would require 34.2% of the median household income of $79,900 to cover the monthly principal and interest payments, he said.

Lokenauth noted that in 1950, the median home price was $7,400. With 20% down, the mortgage amount would be $5,920, requiring 20% of the median household income for monthly payments.

In 1970, the median home price was $17,000. With 20% down, the mortgage amount would be $13,600, requiring 24% of the median household income for monthly payments.

Queuing up 1990, the median home price was $79,100. With 20% down, the mortgage amount would be $63,280, requiring 25% of the median household income for monthly payments, Lokenauth said.

Kenneth Travis, president and CEO of Greenlight Mortgage in Longview, Texas, said how much house people can get for their money has changed over the years.

The caveat is that it depends on – you guessed it – location.

“If folks are using 34.2% of their median income on home payments, that probably gets them an average-sized house with the usual stuff. But it really depends on where they’re buying. Some places might offer a smaller house, and others a bigger one for that price,” Travis said. “It’s always been a mix of how much houses cost and what the loans are like.”

Travis said that in 1950, following the war, “a lot of people wanted houses. The loans were different then, with usually shorter times to pay back. Houses were simpler and smaller but were generally good for that time.”

Things got pricier in the 70s because of money issues in the country, he continued.

“Houses got a bit bigger, and they started having more modern things in them. But the loans were more expensive because of higher interest,” Travis said.

By 1990, there were a lot of different house types and sizes. Loan interests got a bit better, so people might’ve gotten a nicer or bigger house than before. But in some big cities, house prices went up a lot, Travis said.

So although Millennials may be correct in saying they are spending more of their income to pay for an average home, house sizes and amenities have improved over the years as Americans demand to live in more comfort. And the argument about interest rates is true, but past generations have also had to contend with high rates as part of the borrowing process.

It’s not just prices and interest rates that have held some buyers back recently.

Last year, 9.1% of home purchase applications received the nix. The culprit: “insufficient funds.” That came in at a greater frequency than at any other time since records began in 2018, the Consumer Financial Protection Bureau reported, according to

Matthew Gardner, chief economist of Windemere Real Estate, explained that a greater number of mortgages are getting the thumb’s down “because lenders continue to tighten lending standards.”

Significant net shares of banks reported having tightened standards on non-qualified-mortgage jumbo residential loans and HELOC’s, while a moderate net share reported doing similarly with standards on QM jumbo, non-QM non-jumbo, sub-prime, and QM non-jumbo, non-GSE eligible loans, Gardner told The Mortgage Note. He did note that, by contrast, only modest net shares of banks reported tightening standards on GSE-eligible and government loans.

Despite the difficulties, a mortgage is how a majority of people, especially first-time buyers, get onto the ladder of homeownership and there are benefits.

A residential mortgage “allows a home buyer to spread out the purchase price; minus the down payment, but inclusive of interest on the unpaid balance of the loan — over the life of the loan,” which is often 30 years, said Lawrence White, a Robert Kavesh Professor of Economics at the Stern School of Business at New York University.

“This greatly increases the affordability of buying a house,” White said.

How Much Do Americans Owe On Their Homes?

Overall, Americans are on the hook for $12.14 trillion on 84 million mortgages, according to LendingTree. The proof’s on their credit report where, per person with a mortgage, it added up to an average of $144,593. In the country, 70.2% of consumer debt is represented by mortgages.

But that’s not the end of the story. Americans, bless those very same cards, were looking down the barrel of a $349 billion tab on 13.1 million home equity lines of credit or HELOCs. Per account, that equates to an average of $26,702. As for outstanding HELOC debt: it chimes in at a rate of U.S. consumer debt of 2.0%.

By state, average loans were highest in Hawaii at $464,994, the District of Columbia at $355,986, and Utah at $295,704. They were lowest in West Virginia at $150,245, Indiana at $161,580, and Michigan at $160,707.

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