Is It More Difficult to Buy Your First Home Today Than 50 Years Ago?

Buying a first home has long been considered a major milestone of adulthood—part of the so-called "American Dream." But in today’s housing climate, that dream feels increasingly out of reach for many. So, how does the experience of buying a first home today compare with what it was like 50 years ago? The short answer: It’s more complicated, and in many ways, yes—it is more difficult.

1. Home Prices vs. Income: The Gap Has Widened

In the 1970s, the average home in the U.S. cost around $25,000. At the same time, the median household income was roughly $9,000 a year. That’s a price-to-income ratio of about 2.7 to 1. Fast forward to today: the median home price in the U.S. hovers around $400,000, while the median household income is approximately $75,000—a ratio of over 5 to 1.

This means homes have become significantly more expensive relative to what people earn, making it harder to save for a down payment, qualify for a mortgage, or afford monthly payments.

2. Rising Student Debt and Living Costs

Today’s first-time buyers are often saddled with student loan debt—something that was far less common 50 years ago. Add to that rising healthcare, childcare, and transportation costs, and young adults have fewer financial resources to devote to saving for a home.

3. Interest Rates: Then vs. Now

It’s true that mortgage rates in the early 1980s soared above 15%, while current rates (as of 2025) hover around 6–7%. So at first glance, today’s rates seem more favorable. However, when paired with the much higher home prices, even a “low” interest rate doesn’t offset the affordability gap. Monthly payments are still dauntingly high.

4. Housing Supply and Competition

In many parts of the U.S., there’s simply not enough housing to meet demand. This shortage drives up prices and fuels bidding wars, especially in desirable urban and suburban areas. Fifty years ago, suburban expansion and post-war housing booms made homes more accessible for average-income families. Today’s tight inventory means fewer choices and fiercer competition.

5. Generational Wealth and Inequality

In previous generations, many first-time buyers could expect financial help from parents or inherit property. With growing wealth inequality and many families struggling across generations, fewer young adults have access to intergenerational wealth that can serve as a springboard into homeownership.

So, Is It Harder Today?

Yes—at least for the average person. While some aspects like lower interest rates or more lending options can help, they don't make up for the high cost of homes, stagnant wages, and broader economic challenges facing today's young adults.

For many, buying a first home today requires more years of saving, greater financial discipline, and often, significant sacrifices. That doesn't mean it’s impossible—but it does mean that the path to homeownership has become more complex, and often more stressful, than it was half a century ago.