When people ask whether houses are less affordable today than in past decades, the honest answer is: compared to last year, yes. Compared to most of the last 50 years, no. When you adjust for inflation and account for mortgage rates at the time of purchase, buying a home today is actually less expensive than it was at nearly every other point since 1975. That context changes the entire conversation.

You know how every headline right now seems to be telling you that housing affordability is at a crisis point? And how it can start to feel like you have already missed your window, that the market has simply run away from you? A lot of people looking at Los Altos homes for sale are sitting with that exact weight right now. But here is the part most people have not stopped to think about yet: the headlines are comparing today to last year. Not to 1985. Not to 1995. Not to 2005.

What if that comparison is the wrong one to be making?

What Does “Affordable” Actually Mean When Houses Cost Less in Context?

Before you can judge whether houses are less affordable today, you have to agree on what affordable actually means. Is it the sticker price? The monthly payment? What that payment buys in today’s dollars versus dollars from 30 years ago?

What does your current housing situation actually look like right now? Are you renting and watching your payment climb each year with no equity to show for it? Are you waiting for prices to drop to some level that feels safer? How long have you been in that holding pattern, and what is that waiting actually costing you in the Los Altos market?

These are not rhetorical questions. They are worth sitting with honestly.

The Real Numbers: Why Houses Less Than Historical Costs Is the Overlooked Story

Here is the methodology that puts the headlines in context. If you take the average sales price at the end of the second quarter of each decade going back to 1975, assume a 10% down payment, apply the actual 30-year fixed mortgage rate for that period as reported by Freddie Mac, and then convert the resulting monthly payment into today’s dollars using an inflation calculator, a clear picture emerges.

In most decades, the inflation-adjusted monthly payment was higher than it is today. In 1985, mortgage rates were hovering near 12%. In 1995, they were closer to 8%. Even in 1975, when home prices were dramatically lower in nominal terms, the inflation-adjusted monthly cost of ownership was greater than what buyers are dealing with now.

Los Altos real estate has appreciated significantly over the past decades, but so has every other cost in the economy. That is simply inflation. The question is not whether prices are higher in raw numbers. The question is what you are actually paying in real terms, once you account for what a dollar is worth today.

There were only two moments in the last 50 years when buying was genuinely less expensive in inflation-adjusted terms than it is right now. One was last year, when prices had not yet caught up and rates were still historically low. The other was 2010, in the aftermath of the housing crash, when roughly one-third of all sales were distressed properties including foreclosures and short sales selling at deep discounts. That market rewarded buyers, but it also reflected an economy in serious pain. Are you waiting for that kind of moment to return? What would have to happen to the broader economy for prices to fall that far again?

Have You Thought About What Waiting Costs You in Los Altos?

Here is a consequence question worth sitting with. If nothing changes in your housing situation over the next three to five years, where does that leave you? If rent keeps rising, as it has across Santa Clara County in past decades, and home equity keeps building for the people who bought instead of waited, what does that gap look like at year five?

Homes in Los Altos have historically held and grown their value even through market corrections, partly because of the area’s proximity to major employment centers and the sustained demand that creates. Property values here tend to recover faster than the broader national average. Does that change how you think about timing?

The buyer who purchased in 1985 at a 12% mortgage rate did not feel like they were getting a deal. Neither did the buyer in 1995 or 2005. But those buyers built equity. They are not renting today.

Where Does That Leave Someone in Your Situation?

Based on what a lot of buyers in this area are sharing, the fear is not really about affordability in the abstract. It is about making a move at the wrong moment. That is a legitimate concern worth exploring carefully. The data suggests that the “wrong moment” people fear is actually less likely than the headlines imply, especially when you look at the inflation-adjusted picture across past decades.

Could this be the clarity you have been looking for? If the numbers above shift how you see your options, the next step is a straightforward conversation, not a sales call, just an honest look at what buying actually looks like for your specific situation, your budget, and your timeline in this market.

Timothy Alston, Broker (DRE# 01328224), Aegis Luxury Real Estate, is available to walk through the real numbers with you. Reach out at (408) 207-4593 whenever that conversation makes sense for you. How you proceed from here is entirely your call.