How cushy did those Boomers have it compared to Gen Z, really?
Posted by Ed Folsom, October 20, 2026.
Everywhere I look lately, it seems there’s another news story complaining about high costs and a lack of affordability. I see claims that things are way tougher now than for all those Baby Boomers who coasted along Easy Street all their lives, hoarding all the money and leaving the toughest of times for the kids these days. So, I thought I’d take a look at some numbers then and now. I’m a Boomer, born in 1955. I must have somehow missed out on the fat salaries, cheap houses and cars, and the general life of ease in the 60’s through the 90’s; unless maybe things weren’t quite as cushy for the geezers and aren’t quite as dire for Gen Z as portrayed.
The Baby Boom generation was born between 1946 and 1964. The oldest Boomers will turn 80 this year. The youngest will turn 62. They have had vastly more time to work for an income and therefore accumulate wealth than people 40, 50, or 60 years younger. But it’s only possible to save and accumulate wealth if income exceeds spending, or if a person’s spending is less than income. Boomers, we are told, had a much easier time saving money from their big fat salaries than kids do from the skimpy scraps tossed their way these days, because everything was so much more affordable in the Baby Boomer times. Is it true?
Was the inflation-adjusted median household income higher in the Boomer days than it is now?
According to the Federal Reserve Bank of St. Louis, in 1966, when a Boomer born in 1946 turned 20, the median U.S. household income was $7,532/year (see here). In 1976, when that same Boomer turned 30, it was $14,960/year. The sharp rise was largely due to inflation, which hit a year-over-year annual average of 8.2% from 1973 through 1976 (see here). Adjusted for inflation, the 1966 median household income is worth $61,180 in 2025 dollars and the 1976 median household income is worth $72,050 (see here).
Because I, personally, worked full-time in 1975-76, on hiatus from the University of Maine, Orono, I will share my own income numbers from that time. My job at the Snow & Nealley lumbering tool manufacturing plant in East Hampden, Maine, initially paid $2.50/hour for 45 hours per week, 7 a.m. to 4:30 p.m. with a half-hour for lunch. When the minimum wage jumped from $2.10/hr. to 2.30/hr., on January 1, 1976, I got a half-a-quarter pay bump to $2.625/hr. The last 5 hours were at time and a half, so my weekly gross pay was $124.68/week. Working 52 weeks a year at that rate amounts to $6,483.36 annually, making this single worker’s income fall well below the 1976 median household income.
Last year, in 2025, the median U.S. household income was $110,500. In other words, the 1966 U.S. median household income adjusted for inflation ($61,180) is only 55% of the median household income in 2025. By the same measure, the 1976 inflation-adjusted median household income ($72,050) is worth 65% of the 2025 median household income. The median household income is much higher now than it was back then and the median household is now smaller. Standing alone, this increase in the income side of the income/spending equation should make saving easier these days.
Was it more affordable to buy a house in the Boomer days than it is now?
Housing seems to be impossibly expensive now. Young people simply can’t afford to buy a house anymore. There seems to be a pop culture consensus that it was much easier for the Boomers. Which ones, I wonder?
In the 1950’s, when this Boomer was born, the average square footage of a new single-family home in the U.S. was 908 (see here). By the time I bought my first house, in the 1980’s, that average had grown to 1,740 square feet. In 2025, it stood at 2,405. New houses are significantly larger now than they were in the Boomer days; more than two-and-a-half times larger than they were in the 1950’s and 38% larger than they were in the 1980’s. With the increase in the size of the average new house came an increase in expectations regarding what an average house should be.
Bigger houses cost more than smaller houses. Bigger houses therefore cut against accumulating savings on the expense side of the income versus spending calculation. But despite the larger average size of houses now than in the Boomer days, the main question is: Is the average house now unaffordable for a young buyer compared to the average house in the Boomer days?
What makes buying a house affordable versus unaffordable?
Most people who buy houses, especially first-time buyers, don’t pay cash. It isn’t the purchase price itself that determines whether a house is affordable for the vast majority of buyers. Instead, buyers consider a house affordable if they can make the monthly mortgage payment and unaffordable if they can’t. For our Boomer days versus now comparison, let’s have our buyers borrow 90% of the purchase price of a median-priced home at the prevailing interest rate. Then, we can compare the loan payments (excluding real estate taxes and PMI costs) to the prevailing median household income in each time frame.
My younger brother, Jim, was a Baby Boomer. He bought his first house in 1985. The median U.S. home price in the second quarter of 1985 was $100,500 (see here). The average 30-year-fixed mortgage rate was 12.43% (see here). Borrowing 90% of $100,500 ($90,450) resulted in a monthly payment of $960, or $11,520 per year. The median family income in 1985 was $27,740 (see here), which means the mortgage payment for a 90% loan on a median priced house amounted to 41.52% of the 1985 U.S. median family income that year.
Things were a little better for buyers two years later when my wife and I bought our first house. In the 2d quarter of 1987, the median house price was $126,100, but the average 30-year-fixed rate had dropped to 10.21%. A loan for 90% of $126,000, or $113,490, results in a monthly payment of $1,014 and annual payments of $12,168. That’s 39.28% of the 1987 median family income of $30,970.
Moving forward to now, how did things stand for buyers in the second quarter of 2026? At that point, the median-priced U.S. home was $502,700 and the average 30-year-fixed interest rate was 6.16%. Borrowing 90% of $502,700, or $452,430, results in a monthly payment of $2,759, or $33,108 per year. The most recent information I can find on median U.S. household income is for 2025 when it was $110,500, which makes our $2,759 monthly loan payment 29.96% of median household income. That’s a considerably lower percentage of median household income than Boomer buyers were paying for median-priced houses in 1985 or 1987 (11.56% less than in 1985, and 9.32% less than in 1987).
Although housing prices have sky-rocketed since 2020, mortgage interest rates hit extreme lows and even now remain low compared to what Boomers faced from the 1970’s through much of the 1990’s. In fact, my brother and I didn’t face the worst of it. Here are the average 30-year fixed rates for years 1980-1984: 1980-13.74%, 1981-16.64%, 1982-16.04%, 1983-13.24%, 1984-13.88%. Those rates are all more than twice the 6.16% average 30-year-fixed rate that prevailed in the second quarter of 2026.
Granted, buying a house is unaffordable for most young people these days, especially compared to the years before the recent spike in house prices when rates were hovering at very low levels. For instance, between 2012 and 2017 rates averaged below 4% in every year except 2014. In 2012, the median-priced house was $238,700, the average 30-year-fixed was 3.66% and the median household income was $62,240, so the payment on a 90% loan was 18.97% of median household income. In 2017, the median-priced house was $318,200, the 30-year-fixed 3.99%, and median household income $76,140, making the loan payment 21.52% of income. And even after the price spike began, in the second quarter of 2021, although the median house price had already risen to $428,600, the average 30-year-fixed was 2.96%, making the loan payment 21.91% of the $88,590 median household income.
But the fact that buying a house was more affordable immediately prior to the past six years hardly establishes that we are in a time of unprecedented difficulty for buying a house, or especially that Baby Boomers took all the money and the houses away from the young people and pulled the ladder up behind them.
I mentioned earlier that the average house size has increased since the Boomer days and that expectations have increased along with them. I had two younger brothers growing up, and our family of five never had more than one bathroom. In fact, in my experience, 1 was the standard number of household bathrooms in the 60’s and 70’s. The house that my brother, Jim, bought in 1985 was a tiny, un-dormered, one bath Cape Cod, at the margins of what he could afford. He was a mechanical engineer, several years out of college with several years of design and manufacturing experience. And trust me, the price of the house he bought was well below the median price of a U.S. home that year.
When my wife and I bought our first house, in 1987, we were both three years out of law school and eight years out of college, paying off graduate GSL loans at 9% interest, along with a small undergraduate debt. We bought the least expensive decent house we could find in the greater Portland, Maine, area, for $99,900, well below the median-priced U.S. home that year. It was 920 square feet, with a shared dirt/gravel driveway, 1 bathroom, practically zero closet space, and a forced warm air oil-fired furnace with a single vent downstairs below the staircase. The place had enough space to accommodate our first kid, but not enough for the second.
Were Food costs lower as a percentage of income in Boomer days than they are now?
That’s what it was really like for a whole bunch of Boomers. Buy maybe the current affordability problem comes from food prices being higher now than in the Boomer days. Nope. Even during the peak of food-price inflation in 2022, food as a percentage of median income was still a couple percent less than in the 1980’s and about 7% less than in the 1960’s.
Did vehicles cost less as a percentage of income in Boomer days than now?
How about vehicle costs? Vehicles definitely cost more now as a percentage of income, but in significant part that’s because people choose to drive SUV’s, crossovers, and pickup trucks instead of smaller sedans and hatchbacks. Expectation inflation factors in here, too. And trust me, as a Boomer, I can tell you that vehicles last way longer now than the ’60’s and ‘70’s, when 100,000 miles was a stretch and cars practically crumbled into rust heaps after 7 or 8 years. The higher cost is somewhat offset by longer vehicle life for those who keep their vehicles more than 10 years.
Did fuel and energy consume less as a percentage of income in Boomer days than now?
How about fuel costs and energy? Those are generally not more expensive as a percentage of income than they were in the 1960’s either. They definitely cost less than in the Boomer days of the 1980’s (See here).
Did college cost less as a percentage of income in Boomer days than now?
Higher-education costs are definitely higher as a percentage of income than they were in the 60’s through the 80’s (see here). Since 2020, college costs have risen 46.5% faster than the rate of inflation. Tuition at private colleges and universities is far more expensive than in-state tuition at public institutions. For the 2026-27 academic year, in-state public school tuition averages $10,400 per year, versus average tuition of $39,967 at private colleges. The cost of room and board is closer between the two, coming in at an average of $14,604 at public colleges and $16,738 at private.
Altogether, that brings the average total in-state cost of attending a public university to 22.6% of the 2025 median household income, and 50% of the median household income to attend a private college. That’s a lot, no doubt. But it might be worth noting that a lot of Boomers paid their own college tuition and living expenses, paid off their own student loans, and then paid for their kids to attend college. Many Boomers have borne the costs of college both then and now.
The new necessities-of-life electronics and their must-have latest editions.
Electronic, internet-connected gadgets impose costs these days that people simply didn’t have back in the Boomer days, especially for people who need to always have the latest iteration. But do these devices eat all of the additional 35% of inflation-adjusted median household income that’s been gained since 1976? That seems unlikely. I suspect that these devices and the internet that they stream consume more of people’s time and minds than they do of their incomes.
Is inflation driving up prices more now than in Boomer days?
Another big problem with affordability in recent years has come from rising costs due to inflation. Inflation is bad stuff. It erodes the value of the dollar so it takes more dollars to buy the same stuff. Year over year, inflation ran at an average of 6.75% annually during 2021-2022. For the most recent 12 months, through September, it has been running at 3.7%. A lot of people have never seen serious inflation before, because it has hasn’t been around much since 1990. But Boomers have lived through it before, a lot.
From 1973 through 1976, year over year, inflation ran at an annual average of 8.2% (see here). Immediately following that, for the 4 years of the Carter Administration and the first year of the Reagan Administration, inflation ran at an annual average rate of 10%. To combat the rampant inflation, the Federal Reserve boosted the Federal Funds borrowing rate. In 1980, the Fed rate averaged 18%. In 1982, the tactic finally bore fruit, dropping annual inflation to 3.8%. Those were the days when the 30-year-fixed mortgage rate spiked to well over 16%, never falling below 10% again until 1991: Ah, yes, those Boomer days.
In Summary
So, things weren’t so rosy for the Boomers. To recap, real median incomes are up sharply over the 60’s, 70’s and 80’s. Between 1976 and 2025, median household income, adjusted for inflation, rose 35%. The average mortgage payment on a median-priced house is significantly less as a percentage of median household income than it was in the 80’s, even though the average house is larger and has more than one bathroom these days. Food costs less as a percentage of income than it did in the 60’s, 70’s, or 80’s, and energy and fuel costs are lower as a percentage of income than they were in the 80’s. Vehicle costs are up as a percentage of income, but that’s largely because people insist on driving larger, more blinged-out, vehicles, and vehicles do provide better value now because they last so much longer. College costs are up significantly, and people have expenses for electronic devices that are now a necessity of life that didn’t even exist in the days of Boomer youth. But really: The Boomers coasted on Easy Street and Gen Z is getting an unprecedented screwing?
Boomers tend to have much higher wealth than Gen Z’ers because they are old. The ones who are still alive have persisted for somewhere between 42+ and 60+ working years, spending less than they brought in. And, by the way, those Boomers worked significantly more hours between the 1960’s and the early 2000’s than people work now.
So, to the Gen Z’ers: Someone is benefiting from telling you that you’re getting screwed by the Boomers, who had it easy. Who benefits from telling you that, and what are they getting out of it for themselves? Whatever it is, they are not a new breed of magnanimous altruist. They are definitely out to get it for themselves.
