Are houses today the same as houses in 1989? Seems like you'd need a much more detailed analysis than median price to compare apples to apples.

That doesn’t matter to buyers.

If the housing stock is too expensive for the population there can be many causes, and higher quality or larger size housing is just another cause. The causes of the high prices don’t matter to buyers, all they know is they can’t afford to buy. What use is it to them that the homes they can’t afford are better quality?

With the amount of housing turnover in the past few years, to me it seems that plenty of people can afford to buy. Actually an unfortunate amount.

The improvements in home construction have diminishing returns. For example my county now requires residential fire sprinkler systems. Such systems aren’t cheap but also don’t provide any real payoff to homeowner on average.

Improved insulation and air sealing is nice, but you’re not going to see anything close to $200k in energy savings over the building’s life vs just blasting your furnace to a comfortable temperature.

Houses certainly have increased in size though.

Given that the median age of a home in 2019 was 39, that puts half of today's housing stock as being built in 1980 or before. So most of "today's houses" are literally the same houses that were present in 1989, just with three decades of additional depreciation. This is even worse in older, populous parts of the country like California and the Northeast that haven't built as many new homes as in the Southeast. In California and New York, for instance, people are squabbling to pay $1m+ for 43-60 year-old homes. People today are paying more, and getting less for their money.

https://eyeonhousing.org/2021/03/age-of-housing-stock-by-sta...

Those same homes you bought in 1989 are still around. Home construction at the time it was built has little to do with home prices.