Buying a house in 2026 is harder than buying a house in 1976. There is a common narrative on the internet that this is due to some sort of generational conspiracy, where the older generations like the Boomers succeeded in an evil plot to keep the younger generations like Millennials or Gen Z poor. That is complete rubbish. The internet favors simplistic, sensationalist, and wrong narratives over complicated and less interesting truths. The counter-narrative of younger generations having no houses due to spending all their money on avocado toast isn't much better.

The complicated truth here is that patterns of consumption and asset ownership have very much changed over the last 50 years. I sometimes wish that the young people filled with generation envy and complaining the loudest about older generations could be put into a time machine and forced to spend some time in 1976. I doubt they would like the experience very much. No mobile phones, no streaming, no internet, no social media, VHS was just invented, few people had one, and there were no video rental shops yet. Households spent a much larger part of their income on groceries, but had a lot less variety. Any type of consumer goods was comparatively much more expensive. Holiday air travel was expensive and a lot less common.

And then 50 years of increased industrialization and globalisation happened. As a result, the relative cost of consumer goods fell. The relative cost of assets rose. The availability of various services exploded, but that came with a cost. Average screen time rose from 4.5 hours in 1976 to over 7 hours in 2026, but while in 1976 the main cost was buying a TV, today we have far more and far cheaper screens in our houses, but pay a lot more for subscriptions.

At 9% mortgage interest rate, houses weren't all that much more affordable in 1976 than in 2026, and as people had a lot less stuff, they were about 40% smaller. But they did require less down payment. And the value of a house grew faster than inflation in the past 5 decades, so it was a great investment. Still, one shouldn't neglect that most people who bought a house in the 70's had a lot less money left for consumption, and that money bought them comparatively less comfort. A mortgage is a way to force yourself to save more money and consume less, which obviously results in better retirement savings and a more comfortable situation in old age. The personal saving rate of Americans was 12% in 1976, and is under 4% now.

The world changed in the last 50 years, and people changed with it. The 2026 median household lifestyle with its much bigger choice of cheaper consumer goods and services would seem like luxury and science fiction to a person from 1976. But people simply adjusted their expectations to what lifestyle is normal. If we express wealth as the pile of stuff we own and the services we consume, we are a lot richer in 2026 than the people of the same age in 1976 were. But the fundamentals of people only earning money in the middle section of their lives, and their saving rate during that part of their life having a big impact on their retirement finances hasn't changed at all.

In the US, a record number of high earners report living paycheck to paycheck. But that is due to all the expenses that they consider to be "necessary" today, some of which didn't even exist before. Less consumption and higher savings rates are still possible today, even if it might involve resisting stronger temptation. Whether you buy a house or some other investment portfolio with the saved money, your future self will be grateful. It is easy to blame everything on "the economy" or "older generations", but a lot harder to make good lifestyle choices for the long term.