US Consumer Prices Soar 6.2% Last Year, Most Since 1990 | national
– Median house price (unadjusted): $ 11,900
– Median house price (adjusted for inflation in 2020 dollars): $ 104,166
– Price growth since 1950: 31.7%
The homeownership boom continued into the 1960s, as did general prosperity in the United States. Many factors have contributed to the increase in home ownership and the rise in house prices, including a good price-income ratio, which is the income that the price of a house should cost (according to City Lab, that number is now 2.6 years of income). In the 1960s, the price-to-income ratio was 2, which meant that buying a home required two years of household income. Average household income had also increased to $ 6,691 by the late 1950s, up 57.9% since the start of this decade.
Another factor that has contributed to the rise in home ownership and home prices has been changes in mortgage financing led by the Federal Housing Administration (FHA), which like the popular GI Bill in the years that following World War II, made it possible for many Americans to buy homes at an affordable price. Homeownership exceeded 60% in 1960. Mortgage rates have also remained low. In 1960, FHA mortgages were 4.6%, VA-backed mortgages were 4.5%, and the average mortgage rate was 5.1%.
The economy was also booming in the 1960s with factors such as intense growth in the workforce and government assistance to alleviate poverty through food stamps and health insurance. The Fair Housing Act of 1968 also became law during this decade, making redlining illegal and (in theory) opening up a fairer housing market for people of color. While the Fair Housing Act of 1968 enabled legislative advances, homeownership rates for blacks are not higher today.