Comparing Apples To Diamonds

The phrase comparing apples to oranges is an idiom. The apple and orange aren’t just fruits here; they represent two entities that are so distinct they defy direct comparison. Quite often today, we see reports that compare prices of things today to those years ago. They might try to estimate what the amount of money back in 1950 would be in today’s economy. For most comparisons of things like houses or cars, that would be more like comparing apples to diamonds. Let me explain this in more detail for those of you under 65.

The term “starter home” is often used when comparing costs for houses these days, with little or no details. So, it is left to the individual to assume what it means and that it meant the same thing in 1950. I will use the David Weekly Homes website to get information regarding their current offerings.

2025 – Plan #6140 The Elson $395,000 Sq Ft 1693
This is a 1-story, 3-bedroom, 2-bath, 2-car garage, and appears to be at the lower end of the price range on a 45-foot lot. It is a brick house with stone accents and a covered patio area. The kitchens are upscale with solid surface countertops, high ceilings, and upscale lighting and backsplash. It is an open layout with living spaces and many tall windows. All lighting and ceiling fans are above builder-grade. Flooring throughout is above builder grade, as are all the closet spaces. Bathrooms are upscale with double sinks, a large walk-in shower, and a huge walk-in closet in the master. The second bath is a normal size, but above builder grade. The house is fully air-conditioned, insulated, and comes with a fenced back yard and landscaping. The communities have paved streets with curbs and gutters, common areas, an MUD district, and HOA fees.

1950 – “Starter Home” – 800 to 1,000 Sq Ft, $6,000 to $7,500
1 story, 2 bedrooms, 1 bath, 1 car or no garage, wood-framed house, located on the outskirts of town. The street may be paved with shell gravel, open ditches, no landscaping or fences, and no community areas. In most cases, there were very limited or no bus service in the area, and few grocery stores located within walking distance. Most doctor offices were located at or near the few hospitals located near or in the downtown area.

The houses were not insulated in walls or attic, no central a/c or heat, with a small wall-mounted gas heater in the bathroom. A gas outlet in the kitchen for a gas stove (not included) and a gas outlet in the living room for house heating. There were no fans and only windows and doors for cooling the house. The house was wood siding with aluminum windows, all builder grades. The bathroom had a small wall-mounted sink with exposed plumbing below, a 5-foot steel enameled tub was standard, with 4-inch ceramic tiles on the wall, and a tiny showerhead. The garage would have only one electric outlet and might have hot and cold water faucets next to the water heater for washing clothes, if you owned a wringer-type washing machine. The homeowner could install clothesline poles and wire in the backyard to dry clothes.

Most families had only one wage-earner, and that was hourly-paid, and there were no health insurance plans for doctors or hospitals. Adult workers with experience and a full-time job could earn annual pay of $1,500 to $3,000 depending on their skill and experience. The maximum social security taxable earnings in 1950 were $3,000 that was set when SSA started in 1937. Home ownership was not as widespread back then as most people think. My dad was 44 when we moved into our first home, which he was buying and not renting. It was a house built for veterans after the war. He assumed the mortgage when the original family moved. Think the interest rate was 4 1/2 percent. If you had house insurance, it only covered fire damage to the house and not replacing the roofing every time it hailed. Property taxes did not increase every year, and then only when there was a tax rate increase. When things got older, their value did not increase.

Young families today would not consider even a newly built house that would be the same as those houses in 1950. A similar-sized house built to current codes could be built, but developers are required to develop the infrastructure (streets, water, sewer, etc.) and meet zoning requirements, including flood retention areas that must be recovered in the sale price of the homes.

In 1962, I started working for Gulf Oil in June and earned $1,560 for the seven months before taxes and FICA. The following year, I worked a lot of overtime and had a small pay increase, and my earnings were $4,053 gross. I know these totals only because the SSA maximum for withdrawal was $4,800 until 1966. I was a full-time permanent salaried employee, not in a beginner job. In 1963, I worked at least 600 hours of overtime. During my years at NASA (64-66), I probably doubled my income by working huge amounts of overtime. I was a VP of Data Processing at a mortgage company in the ‘70s when I finally had a salary of $1,000 a month. Inflation in Houston began when NASA got going here, and Shell moved their headquarters here. Housing costs began to increase due to increased demand. Inflation is a cycle – higher prices cause salaries to increase, and then prices go up, repeating the cycle.

For many similar reasons, you cannot compare a new car today to a new 1950s car back then. With automobiles, EPA and safety mandates have changed how cars can be built, and customers or manufacturers think the customers want cars with every feature that can be designed. You can no longer get a four-door car with no power, brakes, steering, windows, seats, door locks, a/c, disc brakes, backup camera, and computer-controlled everything. My first car had a 3-speed manual transmission, no power steering or brakes, no a/c, and only an a/m radio. There were no warranties or service plans included. Cars needed oil changes every 2,000 miles and changing the oil filter (if your car had one) every other oil change. The under chassis needs to be greased every 2,000 miles. Brakes needed to be adjusted about 5,000 and the brake shoes replaced at 15,000-20,000 miles. Front wheel bearings needed to be repacked about every 20,000 miles, and the ignition points and plugs were replaced every 20,000 miles. Front-end alignments were required every 20,000 miles or when new tires were installed, or you hit a big pothole or were in a wreck. Gas mileage was 14 to 18 miles per gallon until compact cars in the early ‘60s, like VW Beetle, Rambler, Pinto, or Corvair, that got 20 to 22 miles per gallon when gas was around 25 cents a gallon.

There was no health insurance in the 1950s and in the 1960s, the plans only paid for hospital costs while in the hospital and two-bed rooms. No insurance for doctor appointments, shots, or tests. For maternity in 1967, our insurance paid a flat $175, and in 1970 it paid $250. The doctor had to be fully paid before the 8^th month, and the insurance sent us a check after the baby was home. Most companies required the pregnant worker to quit her job at 6 months. People did not go to the doctor unless they were not able to treat the illness or injury at home. The doctors had a paper chart for patients where they updated the patient’s file with the date, diagnosis, and treatment. Doctors did not take insurance, and in most cases, it was paid by the patient when they left. For hospital stays, if you had insurance, they would determine what the insurance would pay, and you would pay the remainder as part of the patient release process. Back then, the doctor and hospital charges were much lower than now because there was no government paperwork, and insurance did not require so many extra staff for record keeping and waiting for payments, which could include adjustments and refilling.

I could discuss another dozen or more things. You cannot compare things today to the early years without considering all the differences, not just the price. It is more like comparing apples to diamonds than comparing two types of apples.