For most of the '60s, inflation was below 2%, while interest rates were 3 to 5%. Inflation started picking up north of 3% in 1967, and interest rates climbed along with it, to 8%.

High interest rates (especially above inflation) create an incentive to save money, and keep property prices low. The higher borrowing costs keep the bid prices of property down, and the positive real interest rate means people don't need to speculate on assets like real estate to save their money.

https://www.longtermtrends.net/real-interest-rate/

Let me preface this by saying that housing prices are ridiculous.

That said, a new house from the 60's is very different from a new house today.

The things that come to mind:

Much larger kitchen space.

Shared bathroom vs every bedroom has a bathroom plus half bath for guests.

Major code differences for electrical.

new housing isn’t what’s driving up prices though, there are 100 year old houses that are just as expensive despite having more old-fashioned layouts

I see similar arguments with vehicle prices, where vehicles are more expensive, but they are higher build quality, have more features (heated seats, blind-spot warning, etc.), so it's not technically correct to use the term "inflation" since the product is different.

But it still feels wrong to say that this isn't a concern and to dismiss it with that argument, since people still need entry-level options, even if we tout the new bells and whistles we've added to the houses or vehicles over the past few decades.

Saying "housing prices are ridiculous" followed by, "but you get more features!" is no consolation to the family looking to get their foot in the door of the housing market.

This doesn't really mean anything unless you have the option to buy a house without all those bells and whistles for less.

Do you have a citation for that claim? I searched for it but didn't find a great source - the one I found put homeownership at ~22yo in 1960 at less than 20%.