The Cost of Living - In 1962

[ua_guy]

I have not vetted this for accuracy, nor was I alive in 1962. Perhaps some of the older members of the forum can add some color to the cost of life in the early 1960's?

What kinds of things stand out? What conclusions can be drawn when comparing to similar statistics today?

[myrdale]

For 2022
New House $350,000
Annual Income $53,000
New Car Price $50,000
Average Rent $2,000
Harvard Tuition $53,000
Gasoline $3.00 / gal
Stamp Cost $0.60

[disneysteve]

These things are always deceptive. National averages and medians in a country as large and diverse as the US don't really tell you as much as people like to think. Income varies dramatically in different places. Home prices and rent vary dramatically.

More importantly, they simply aren't comparing apples to apples. Houses are a perfect example. The average new house in 1962 was tiny compared to the average new house today. A much more meaningful comparison would be to look at price per square foot. In the 1960s the average new house was about 1,200 sq ft. In 2014 the average was about 2,700 sq ft, more than twice the size, even though average family size is smaller.

[ua_guy]

I'm not sure these things are deceptive so much as they invite analysis. Provided the data is accurate, they are snapshots of prices at a point in time which may - or may not - be useful to comparison to see where prices have gone over time and how different factors influence prices.

I wonder about average income. Is that per capita, or household? I would assume that to be "household", however, it was more customary in 1962 for one spouse to be a stay-at-home parent. Now it's customary for both people in a marriage to work. Then again, in a sampling of households, in modern times, finding "households" comprising a single parent with children is much more common.

Milk, it seems, has not increased anywhere near the factor that other prices have.

[myrdale]

I wonder about average income. Is that per capita, or household? I would assume that to be "household", however, it was more customary in 1962 for one spouse to be a stay-at-home parent.

I was assuming it was single income. I'd be interested to see stats of how many homes were single income with the wife playing home maker though. My mother was a nurse and stay at home for about 8 years while we were young, my grandmother worked in a factory, my great grandmother ran a store. I am not sure on my father's side.

The ratios are not too far off. Household x2 annual income, Vehicle 50% of annual income. College cost have been blown out of the water.

[bjl584]

These are always fun to look at even though they don't paint a very clear picture.

I do remember my grandfather telling me a story that when he came home from WWII his first job was working for the railroad for 17 cents an hour

[disneysteve]

I'm not sure these things are deceptive so much as they invite analysis.

Yes, deceptive wasn't the right word as that implies intent to mislead. The numbers are what they are. What I meant is that it's difficult to try to compare them to today's numbers because you aren't necessarily comparing equal things, as I illustrated with house size. Of course houses were relatively cheaper 60 years ago because they were much smaller.

[ua_guy]

Yes, deceptive wasn't the right word as that implies intent to mislead. The numbers are what they are. What I meant is that it's difficult to try to compare them to today's numbers because you aren't necessarily comparing equal things, as I illustrated with house size. Of course houses were relatively cheaper 60 years ago because they were much smaller.

A lot of those homes are in today's median home price data points though because they get resold I still think there are meaningful points of comparison using these average data points. Things like ratios - income to home price. Income to car price. The relative expense of a gallon of fuel, a gallon of milk.

[disneysteve]

A lot of those homes are in today's median home price data points though because they get resold

Are you sure? Both your graphic and myrdale's post specifically state "New" houses.

Even if the numbers are for all houses, new and resold, the discrepancy still exists for the same reason. Houses are much bigger now.

I agree that the data makes for interesting comparisons, especially for things that are equivalent, like a gallon on milk. Of course, that's problematic too because the Federal government regulates milk prices so it's not a free market. I don't know if today's milk market is the same as it was in 1962.

[ua_guy]

I saw "new" but it wasn't registering. Even at twice the price if we assume double the size to equate to modern homes, that's a pretty steep increase from $25k to $350k.

[Petunia 100]

These things are always deceptive. National averages and medians in a country as large and diverse as the US don't really tell you as much as people like to think. Income varies dramatically in different places. Home prices and rent vary dramatically.

More importantly, they simply aren't comparing apples to apples. Houses are a perfect example. The average new house in 1962 was tiny compared to the average new house today. A much more meaningful comparison would be to look at price per square foot. In the 1960s the average new house was about 1,200 sq ft. In 2014 the average was about 2,700 sq ft, more than twice the size, even though average family size is smaller.

Part of the problem is that builders rarely offer smaller homes; they are building McMansions. So if you want a smaller home, you are looking for older homes or doing a custom build. At least, that is what I have found to be true in my neck of the universe.

[disneysteve]

Part of the problem is that builders rarely offer smaller homes; they are building McMansions. So if you want a smaller home, you are looking for older homes or doing a custom build. At least, that is what I have found to be true in my neck of the universe.

Very true. It's very hard to find new homes that are the size of new homes in the 50s or 60s or 70s. About the only place you commonly do is in retirement communities where a senior couple or single senior is now living in a house the same size that would have been occupied by a family of 4 or more a few decades ago.