Today, many talk about rising property prices. Indeed, if we compare housing prices today and 20-30 years ago, we can see that housing prices have grown much more significantly than household incomes. But how affordable is housing today from a historical point of view? Was a house 50-100-200 years ago more affordable than it is today? And what is the future of the real estate market? Let's compare the affordability of housing in different historical periods using the example of the United States.
1800s — Early 1900s: Emerging Market
In the 1800s, the concept of home ownership as we know it today was quite different. The U.S. was a largely agrarian society, and for many, owning land and a home often meant owning a farm. It was also a period of westward expansion, during which the U.S. government often gave away land for free or very low cost to settlers (e.g., the Homestead Act of 1862). Those without property often built their own homes, making the cost of a home more about the labor it took to build it than the price of purchasing an existing structure.
Early 1900s — 1950s: Urbanization
During the early 20th century, industrialization shifted the U.S. to a more urbanized society. The Great Depression in the 1930s made home ownership difficult for many. However, the New Deal created the Federal Housing Administration (FHA), which insured mortgages and lowered the barriers to home ownership. After World War II, the GI Bill provided low-cost loans to veterans, sparking a housing boom.
1950s — 1970s: Golden Age of Housing
The post-war period, from the 1950s through the 1970s, is often considered the golden age of affordable housing in the U.S. The average family could afford a home on a single income, largely due to policies encouraging home ownership and the growth of suburbs. However, homes were generally smaller than today's standards.
1980 — 2009: Mortgages Boom
This period saw the start of a significant rise in housing prices. Some factors included the deregulation of financial institutions, which led to easier credit and larger mortgages, and an increasing view of homes as investments. The 2008s also saw the housing bubble and the subsequent Great Recession, which created a temporary drop in prices but a surge in foreclosures.
2010 — 2021: Post-Recession and Pandemic
In the 2010s and into the 2020s, the housing market recovered from the Great Recession, but with significant regional differences. In many coastal cities and tech hubs, housing prices skyrocketed, making it increasingly difficult for average families to afford homes. However, in other parts of the country, home ownership remained relatively affordable. Also, historically low interest rates allowed many families to afford larger and better homes, but this also drove up prices.
In the wake of the COVID-19 pandemic, there were further fluctuations in housing prices. While prices in some cities fell as people left for less dense areas, overall, U.S. home prices increased significantly during 2020 and 2021 due to high demand, low supply, and low interest rates. In 2021, affordability became a significant issue, as home prices rose faster than wages in many areas.
2022 — 2023: Revolutionizing Housing Affordability
Today, new construction technologies such as 3D printing and tokenization are reshaping the housing landscape. For example, Home Key uses an innovative approach to build a modern house at the cost of an apartment in the same area. By harnessing technology and efficient building techniques, it drastically cuts costs without compromising on quality.
Unlike the traditional housing market, with its soaring prices, Home Key's model provides a sustainable, cost-effective solution. And although the momentum of the past continues to operate and prices are rising in many areas, with new technologies and revolutionary projects, there is hope that modern housing will soon be available to every family in all corners of the planet!