Saw a meme from some Gen Z or millennial complaining that their grandparents house only cost $35,000 in 1973 but that house is worth $2 million now, far outpacing inflation.

It's true. If you put $35,000 in 1973 into an inflation calculator, it comes out to $244,000 today. Far less than some houses have appreciated to in recent years. But that doesn't tell the whole story.

First, we need to look at median figures to even out local market changes. Not every $73,000 house in 1973 is worth $2 million. The St Louis FED says that the median home price in 1973 was $34,000 ($237k in today's dollars). The median home price today is $428,400. That's about 1.8x inflation.

But houses have also got a lot bigger. The median home size in 1973 was 1660 sq ft. So the typical house price per square foot was $20.48 ($142/sq ft in today's dollars). The latest data I could find for average house size is 2700 SQ ft in 2015. That comes out to $158 per square foot, or about 1.11x inflation. Getting pretty close to even.

Another interesting data point is that despite houses getting much bigger, we also have fewer people per household living in them. The average household size in 1973 was 3.01 people per household, or about 552 SQ ft per person. That means the price per square foot per person was $61.60 ($429 in today's dollars). But today there are only 2.5 people in an average household, or 1080 SQ ft per person. So the price per square foot per person today is $396, cheaper than it was in 1973.

So housing costs are actually cheaper, we are just taking up more space per person than we did before. But if you bought a house today that had the same SQ ft per person as one in 1973, you'd be (on average) paying a little less for it.

Thank you for coming to my TED Talk.