The Affordable Housing Crisis: Historical Trends & Inflation (Part 2)
- J. Boling
- Jun 2
- 2 min read
INTRODUCTION
Understanding the economic shift:
Housing affordability is not simply a product of today's market trends; it is the result of many decades of market shifts, trends, and idealisms that have culminated in the climate we see today. Historical housing trends follow inflation, government policies, and business costs, which we mentioned in part one. Over the ever-present taskmaster we call time, starter homes became increasingly unobtainable due to many factors. Vintage Design aims to bring us back around full circle through our movement and desire to make houses affordable again.
HISTORICAL TRENDS
The shift towards larger homes:
As a country, during most of the twentieth century, starter homes provided an accessible path to home ownership. In the 1950s, the average home size was around 983 square feet, which helped keep housing accessible to young families (U.S. Census Bureau, 2019). Looking forward several decades to the 1980s, this had risen to approximately 1,500 square feet, which aligned with the country's economic growth and affordability of materials (National Association of Home Builders [NAHB], 2018). However, as time marched into the '90s and '00s, the rise of the McMansion became apparent. Home sizes increased rapidly, averaging over 2,000 square feet by the mid-2000s (NAHB, 2020). This shift was driven by:
Builder preferences favored larger, higher-profit homes. A builder could increase their cost per square foot from 50 to 100 dollars to 300 to 500 dollars without increasing the quality of craftsmanship.
The cultural shift embraced the "yuppie" and "bigger is better" mindset.
Lower material costs allowed larger homes to remain a viable option.
While housing sizes trended upward, affordability diminished for first-time home buyers. Rising inflation and the surge of construction costs made the trend of larger homes increasingly unsustainable.
INFLATION
The grip on housing costs:
Inflation is the most frightening word to anyone concerned with building a legacy for the future. This also applies to the housing market and the affordability of everything. Materials costs surged in just a few decades, outpacing wage growth by leaps and bounds. Unfortunately, this poses a serious hurdle for companies such as Vintage Design in creating affordable starter homes.
Due to supply chain issues, the cost of lumber increased by over 300% between 1990 and 2020 (National Association of Realtors [NAR], 2025).
Concrete and steel prices have also increased by more than 200%, making the most basic means of construction expensive (U.S. Bureau of Labor Statistics, 2025).
Labor shortages after the 2008 recession and COVID-19 further exacerbated costs, making homebuilding slower and pricier (Federal Reserve Economic Data [FRED], 2024).
While wages have only seen modest increases, home prices have skyrocketed, and according to the graph above, most of that cost has been lumber. This makes affordability difficult for younger buyers.
References
Federal Reserve Economic Data. (2024). U.S. housing market trends: Construction costs and inflation. Retrieved from https://fred.stlouisfed.org
National Association of Home Builders. (2018). Historical home size trends in the United States. Retrieved from https://www.nahb.org
National Association of Realtors. (2025). Starter home price trends: A century-long analysis (1925–2025). Retrieved from https://www.nar.realtor
U.S. Bureau of Labor Statistics. (2025). Historical wage trends vs. home affordability. Retrieved from https://www.bls.gov
U.S. Census Bureau. (2019). Growth of home sizes in the U.S. Retrieved from https://www.census.gov
Comments