Toll Brothers Inc (TOL): How the Average American Home Has Changed in the Last 40 Years

This shouldn’t be surprising. In terms of real GDP per capita, the country is 84% richer today than it was in 1973. And homes have been the single biggest show of American wealth for centuries. People get richer and they want a bigger house. It’s been like this for centuries, and it won’t likely end.

What’s interesting is that even though we’re living in larger homes, the size of an average household is shrinking. In 1975 the average American household had 2.94 persons. By 2004 that was down to 2.57. Oddly, as recently as 1986, just 12% of new homes had three or more bathrooms. Last year, nearly a third did. Indeed, the average new home now has more bathrooms than occupants. Look how far we’ve come, grandma!

Yale economist Robert Shiller once explained another thing about evolving homes: They keep a lid on prices:

It’s just a manufactured good, and progress is always happening. And on top of that progress, there’s the outmoding, the out-of-style factor. So what kind of houses will they be building in 20 years? They may have lots of new amenities. They will be computerized or something in some way that we can’t anticipate now. So people won’t want these old homes.

How much home do you need to live comfortably? Sound off in the comments section below.

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The article How the Average American Home Has Changed in the Last 40 Years originally appeared on Fool.com.

Fool contributor Morgan Housel has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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