If you just glance at raw numbers, it looks like housing has gone completely off the rails. This Certified Foolish Planner – with over a half million followers – thinks so at least. He wants to know “who broke housing”?

He writes that the public has been victimized by high housing prices …

It’s true that in 1976, you could buy a home for $44K – that’s roughly $25–$30 per square foot. Today, that number is closer to $170–$200+. That’s a 6–7x increase—and at first blush, it feels like proof that homeownership has become wildly unaffordable.

But as always, the smart move is to zoom out and adjust for some other factors. Once you factor in inflation and home size, for instance, those 1976 dollars translate to about $140–$175 per square foot in today’s money. Homes are much, much bigger today …

So when you do the math, you find that in real (inflation-adjusted) terms, housing is only about 15–25% more expensive per square foot than it was in the mid-1970s.

That’s not nothing—but it’s also not the catastrophe the nominal numbers suggest. The real story is less about runaway construction costs and more about everything wrapped up in and out of the house: land prices, zoning restrictions, and modern building standards.

Today’s homes aren’t just bigger – they are better in every way. Today’s homes have central air, better insulation, terrific windows, and top-notch appliances. If you are like me, the house you lived in 1976 likely didn’t have many of those things. Half the homes in the USA didn’t have a dishwasher or central air conditioning.

In other words, we’re not just paying more—we’re choosing more. And like most things in personal finance, that distinction matters. Any CFP worth their business card should know that!

Image: Pixabay