In 1963, the average price of a new home in America was $18,000. Last year, an average home sold for $212,000.
What does this tell us? Almost nothing useful.
Yes, it shows that there has been inflation. But inflation measured against what? The average worker earned just more than $2 an hour in 1963. Last year, the average wage was nearly $20 an hour. And the average home in 1963 was 1,450 square feet, versus 2,169 square feet last year. Adjust for both, and an average American could buy more property per hour of labor last year than he or she could in 1963.
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