https://fred.stlouisfed.org/series/MEHOINUSA672N
Personal income is up more than 50%.
https://fred.stlouisfed.org/series/MEPAINUSA672N
And that doesn’t account for demographic changes: Households are smaller on average than 40 years ago and there’s been a significant surge in the foreign-born population, mostly from much poorer origins.
Further, while the inflation calculation includes some hedonic adjustments, it’s really hard to capture the aggregate of the thousands of diffuse lifestyle benefits of living in 2025 v. 1985. Personally, I’d miss burritos.
Yes, housing supply should be much more abundant. The constraint on supply has not been the 1%, but government regulation through zoning and environmental restrictions.
This is belatedly being recognized and addressed in a shockingly bipartisan manner for now.
But also worth noting that the median home today is much larger and nicer than in 1985. Interest rates have (even today) been low enough—and incomes high enough—that ownership rates for these bigger, better homes are a few ticks higher than 40 years ago, as well.
Though I still think that longer-term inflation adjustment (CPI based comparisons even more so) always warrant a critical look.
> Yes, housing supply should be much more abundant. The constraint on supply has not been the 1%, but government regulation through zoning and environmental restrictions.
I'm not buying the whole "regulation is to blame for rising housing costs" at all. If it was, I would expect countless "housing havens": states/nations in the US/Europe with "correct regulation" and housing costs at least staying stable over the last decades: But I don't see those.
My take on this is that this is mainly a consequence of the Baumol effect; local-labor intensive products like houses, childcare, education suffer from strongly rising costs because wages increased generally; regulation cant/wont magically solve this.
But if you just compare wage development itself, things look much better over time than they actually are for the average person, because you omit this effect from your consideration by design.
So things actually improved much less for the average American than a first glance at your numbers suggests.
Housing is pretty much the cornerstone of American society. It's the one thing the middle class has done to increase their wealth and security. It's not just a specific good - it's the poster-child of the American dream and American prosperity.
Obviously policymakers haven’t over-focused on that number, and to some extent that’s a big mistake that is hopefully now being corrected.
But it’s one number, and doesn’t even tell the story of housing affordability, let alone the state of the economy for the median citizen.
The other lending that the US (and Western governments in general) massively subsidize is education. And look at what has happened to the cost of housing and education. They have both massively exceeded general rates of inflation.
The cure is worse than the disease.