09/16/2026
Why did Americans stop saving and start buying houses? đźŹ
Here's the whole thing, short version:
The dollar. Until 1971 it was tied to gold. Since 1972 its purchasing power has fallen every single year, without exception. A dollar from 1971 buys about 12 cents today.
So saving stopped being safe. It became a slow, guaranteed loss. People did the only thing left — they bought the one asset a bank will lend an ordinary earner $400,000 to buy. 📉
And prices followed. A median home cost 2.3 years of household income in 1970. By 2022 it was 5.6, and most of that happened in just three years.
But here's what almost nobody calculates. That home went from $25,000 to $415,000 — except the 1971 house is already "worth" $204,000 today purely because the dollar shrank. Real appreciation is about 1.3% a year. Taxes, insurance and maintenance run closer to 3.5%.
Appreciation alone does not pay for a house. It never has.
None of which means don't own property. For most households the alternatives are worse. It just means owning it honestly:
🔹 Don't buy into a frenzy
🔹 Be able to hold
🔹 Reserve for repairs — more than you used to
🔹 Get real management, not rent collection
Ask why before you act. Not whether the price will go up — why it's going up, and whether the reason has anything to do with people needing somewhere to live.
