“The Typical Home Will Cost a Million Dollars As Millennials Hit Retirement, Economist Says”
That was the title of an article on Realtor.com earlier this week. According to Lawrence Yun, the chief economist for the association, the median U.S. home price could hit $1 million by 2050 if future price gains simply duplicated historical gains.
Yun’s conclusion? “Homeowners will continue to build wealth, while renters are simply spinning their wheels.”
Well, maybe. Maybe not. We’ll know when we know what happens to other prices. We can’t tell much based on the median price of houses alone. We need some context.
The Message of History
For most living Americans, Yun is spot on. Since the end of World War II the virtue of homeownership has become a truism. Own, don’t rent. While there have been awkward periods – such as the housing bubble in 2005-2006 — long-term ownership has been a good deal for most owners. It has been a spectacular deal for those who bought in areas of high appreciation. Home appreciation has improved the retirement of millions of people who have sold appreciated homes in the Northeast and moved to Florida or Arizona. Ditto moving from the Midwest to the Sunbelt or the west coast to the Sunbelt. Inflation has been a good friend.
When Prices Sound Silly
I can testify to this as an official old person. You can tell how old someone is by what they paid for their first house. The older they are, the crazier the price will sound. According to FRED, the database at the St. Louis Federal Reserve Bank, here is what history shows for the median home price:
–Q1, 2026: $403,200
–Q1, 2010: $222,900
–Q1, 2000: $165,300
–Q1, 1996: $137,000
–Q1, 1990: $123,900
–Q1, 1980: $63,700
–Q1, 1970: $23,900
–Q1, 1963: $17,800
A person who owned a house for the length of a 30-year mortgage saw the home value nearly triple from 1996. The home equity would have grown 15 times with a 20 percent down payment, or 30 times with a 10 percent down payment.
My First Home and the Price of a Sub-Zero Refrigerator
In the early 1960s I bought a townhouse in the South End of Boston. It was next to a church and was functioning as a rooming house. Single, I moved in and kept it as a rooming house. I payed a steep $15,000 for the building.
Today, that price seems absurd. Indeed, I wrote about it in 2018 when I found a new Sub-Zero refrigerator cost more than I had paid for the entire four-story house. You can read the story here.
Asset Inflation, Price Inflation and Wage Growth
The reason history may not repeat itself is that there isn’t just one inflation to consider. There is asset inflation, the increase in the price of long-term assets such as houses, commercial real estate and common stocks. There is goods inflation, the increase in the price of frequently purchased consumption items such as eggs and bacon, beef and chicken, or clothing and paper towels.
What gets purchased, however, is determined by wage growth. It can be more than, or less than, the inflation rate for goods. For more than half a century, wage gains have been weak. Wage growth has often trailed the inflation rate for consumer goods. It has routinely trailed the inflation rate for assets. Today, virtually all measures show that stocks are selling at near historically high values. We also know that while home prices have declined in the last year, they are still selling at historically high valuations.
Visual Capitalist, one of the best websites for presenting data with powerful visualizations rather than drab number tables, shows the rise from 3.5 times median income in 1985 to 5.8 times in 2022. You can see the chart here. You can see a more detailed and longer-term chart from Harvard’s Joint Center for Housing Studies here. However the data is sliced and presented, there is a growing gap between the minority of Americans who live in the asset-based economy and the majority who live in the labor, wage-based economy.
Some Bright Spots
The price news, however, isn’t all bad. While a Sub-Zero may cost more than my first house (or yours if you’re old enough), I recently bought a smart TV for $149. That’s about half as much as I paid for a set less than half as large in 1967. The dollar has lost about 90 percent of its purchasing power since then (according to the Bureau of Labor Statistics CPI Inflation Calculator), so I’m getting four times the TV for a tenth of the money.
Improvement has been fantastic in all things electronic. But getting more for less also extends to automobiles and some other consumer goods. Back in 2000 I could show that a Volkswagen turbo New Beetle delivered superior performance to a 1965 Porsche 356 Carrera at a lower price. I called the car my “Hedonic Porsche.” Today, I could extend that, noting the performance of my Tesla Model Y and my $99 a month Full Self Driving chauffeur.
A Dark, Neo-Feudal Future?
Society as we know it began when feudal society was weakened by the Black Death. The ruling landed class was forced to recognize the value of labor provided by serfs with no land. While it may seem a reach, some now see a coming “neo-feudalism.” That would be a society where most income was from capital and its ownership. In that world, labor income is demeaned and limited, not to mention completely controlled by the owners of capital. (You can read about it in Joel Kotkin’s book “The Coming of Neo Feudalism: A Warning to the Global Middle Class” (Encounter Books, 2020).)
It’s easy to hyperventilate on this notion, but if homeownership declines and more people become RV owners while working short, underpaid shifts at Amazon and Walmart distribution centers, or at gigantic hospital medical complexes – as seems to be happening – neo-feudalism could be more real than democracy.
Related columns:
Scott Burns, “The Two Inflations,” 6/7/26: https://scottburns.com/the-two-inflations/
Scott Burns, “Finding the Top of Up-Scale,” 7/8/2018: https://scottburns.com/finding-the-top-of-up-scale/
Scott Burns, “Would You Lend Money To This Family?,” 8/7/2011: https://scottburns.com/would-you-lend-money-to-this-family/
Scott Burns, “Is America Hitting Peak Consumption?,” 10/14/23: https://scottburns.com/is-america-hitting-peak-consumption/
Scott Burns, “The Hedonic Porsche,” 9/9/2000: https://scottburns.com/the-hedonic-porsche/
Scott Burns, collection of columns about Tesla Model Y: https://scottburns.com/?s=Model+Y
Sources and References:
Omri Wallach, Palavi Rao, Sabrina Lam, “Charted: U.S. Median House Prices vs. Income, 2/27/2024: https://www.visualcapitalist.com/median-house-prices-vs-income-us/
Peyton Whitney, “Home Prices Surge to Five Times Median Income, Nearing Historic Highs,” 10/6/25: https://www.jchs.harvard.edu/blog/home-prices-surge-five-times-median-income-nearing-historic-highs
www.longtermtrends.com: “Home Price to Income Ratio”, 2/28/2026: https://www.longtermtrends.com/home-price-median-annual-income-ratio/
FRED database, median US home price: https://fred.stlouisfed.org/series/MSPUS
Bureau of Labor Statistics CPI Inflation Calculator: https://www.bls.gov/data/inflation_calculator.htm
Joel Kotkin, “The Coming of Neo Feudalism: A Warning to the Global Middle Class,” (Encounter Books, 2020) on Amazon: https://www.amazon.com/Coming-Neo-Feudalism-Warning-Global-Middle/dp/B08GGBBD7M/ref=sr_1_1?crid=31I5EGLSBFAPQ&dib=eyJ2IjoiMSJ9.d-Z2zJZND0z-F5dMGU8zdqzV4bC7nk6Rl3dYQXWyDgk7FSWrObecz7yKOI_WZvV4EqmtBmWxqRsL62K07B3wjRyeRcRtPqnFKwJuLOW_2x0HSuDBaIIEm7Ce5dwHusE54M9dfc2E16YzsuTts7NnS1SAQbSnePpYYwVYjUl3qI-Y3A0SBZAz20uUXZylCzhgyMt54YBYPUW4oBEw0V_r0dzSVvBxLZUaRBQA68ti7_M.MBYUryBMl92kx9UqypeXskZgSnDGaA26ui1nLsJRnXw&dib_tag=se&keywords=neofeudalism&qid=1781714935&sprefix=neofeudal%2Caps%2C172&sr=8-1
—————————————————————————————————————————-
This information is distributed for education purposes, and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, product, or service.
Photo: Scott Burns, 4/2/2019: A squirrel at home in Texas
(c) Scott Burns, 2026