To Buy a House

In 1952, my parents bought their first house for $10,000 (about $125,000 in today’s dollars), five times my father’s salary. Prefabricated, made of plywood, with five rooms and a bath, it was part of the post-war boom that housed American families. Similar construction around us generated a child’s delight in dirt piles and frameworks. The walls of a neighboring house went up in a day.

​Demand for “starter homes” today far outstrips supply. Prices have risen much faster than inflation or wages. Thirty years ago, on average, buying a house cost a family about four times its annual income; now the house would cost seven times household income. First-time home buyers today average 40 years old, up from age 29 in the 1980s. Almost no one is building modest houses like the one I grew up in.

The reasons are complex; the solutions, obscure. Builders profit more by building grander houses, on larger lots. A big house costs little more to build than a small one, but it will sell for a much higher price to an affluent buyer. Restrictive zoning helps protect the value of those buyers’ new homes. It also eases the burden on local governments. Larger lots and older homeowners mean fewer school-age children relative to property tax revenue.

After my brother and I went off to college, our parents sold their plywood prefab and bought the house of their dreams across town. Home ownership in the United States is a classic building block of personal and generational wealth. It works best when people of modest means can find houses to buy.

Image: Mass produced houses of Levittown, PA, about 1959, cropped. Our edge-of-town neighborhood in West Virginia was much, much smaller, with one short street and a cul-de-sac.