How Much More Time Does It Take to Afford a House Today Compared to the 1980s?

The good old days, when houses were cheap, gas was a buck, and a Big Mac wouldn’t make you feel broke. But were things really easier back then? When it comes to buying a house, the numbers tell an eye-opening story. If you’ve ever wondered how much longer we’re working today (2024) to afford a home compared to the 1980s this is for you.

Housing Costs Then vs. Now

Back in the 1980s, the average house cost around $80,000. Fast forward to 2024, and that number has jumped to a whopping $450,000. On paper, that’s more than five times the price. But salaries have also gone up—right?

In the 1980s, the average annual salary was around $20,000, while today it’s about $60,000. So, shouldn’t things have balanced out? Unfortunately, not when you consider purchase power and how much of your income you can realistically dedicate to housing.

Let’s Assume that we save 30%

Saving 30% of your annual income is possible but it sure isn’t easy to do with an average salary in relation to what things cost these days. To illustrate, let’s do some math.

How Long Did It Take in the 1980s?

If you earned $20,000 a year and dedicated 30% of your income to housing:

• You’d have $6,000 annually set aside for a future house.
• To save for an $80,000 home, it would take 13.33 years.
• Assuming you work 2,000 hours a year (8 hours a day, 5 days a week), that’s 26,660 hours of work to afford a house.

This was back in the time of big hair, Walkmans, and Pac-Man. You could still feel like homeownership was achievable, even if it took some dedication.

What About in 2024?

Today, earning $60,000 a year and setting aside 30% of your income for housing:

• You’d have $18,000 annually set aside for a future house.
• To save for a $450,000 home, it would take 25 years.
• That’s 50,000 hours of work—nearly double what it took in the 1980s.

Now imagine doing this during the era of TikTok, avocado toast, endless streaming subscriptions, and sky-high rents. It’s not surprising that many people feel homeownership slipping further out of reach.

Why the Change?

So, what’s behind this massive increase in time to afford a house? Here are a few factors:

1. Prices Have Outpaced Salaries

Sure, incomes have risen, but nowhere near as fast as housing costs. In the 1980s, the price-to-income ratio for homes was around 4:1. Today, it’s closer to 8:1—meaning houses are much less affordable relative to earnings.

2. Cost of Living is Higher

Back in the day, groceries, utilities, and education were much cheaper. Today, you’re juggling higher bills, student loans, and subscription services. That leaves less wiggle room to save for a house.

3. Lifestyle Expectations Have Changed

People in the 1980s often bought modest starter homes. Now, many first-time buyers aim for larger, updated homes, which can drive up costs.

Yes, it’s true that homes today might come with more features or extra space compared to what you’d get in the 80s. But is the added value really worth double the cost in time? Probably not.

The thought of saving for 25 years just to afford a house is mind-blowing.

That’s Why We Have Banks, Right?

Sure, you might say, “That’s what banks are for—to help us buy houses.” Fair enough! But let’s take a closer look at what “help” really means when it comes to financing a home. Even with generous terms from a bank, the numbers might surprise you.

Total Cost Breakdown for a $450,000 House at 4.5% Interest

1. Monthly Mortgage Payment: $1,824.07
   This is what you’d pay every month for 30 years, assuming you lock in a 4.5% fixed interest rate.
2. Total Paid Over 30 Years (Mortgage Payments): $656,664.16
   That’s just the interest and principal on your loan—not including insurance, taxes, or maintenance.
3. Down Payment (20%): $90,000
   Upfront savings needed to qualify for the best terms.

Grand Total Cost of the House: $746,664.16.

Yeah! That sounds like fun. Spending 66 years living a stupid house dream being handcuffed by the bank.

Even with a relatively low interest rate of 4.5%, you’ll pay more than $296,000 in interest alone over 30 years. Essentially, you’re buying your house 1.65 times over.

Instead of thinking in terms of money, start thinking about how much time you’re exchanging for the things you want. This shift in perspective can truly transform your life.

Everyone should ask themselves: How much time am I trading for my salary, and how much time does my work allow me to gain back for myself?

The input output ratio is important.

Input is the time you invest to earn what you need.

Output is the time that your income allows you to reclaim, time to spend as you choose. Put freedom and liberty at the top of your priorities.

Your time is your most valuable asset.