Houthakker was born in Amsterdam, Netherlands to a Jewish family. During World War II, he and his family were sheltered by Roman Catholics. After the war, he graduated from the University of Amsterdam in 1949. He was married to Polish-American philosopher Anna-Teresa Tymieniecka, the founder of the World Phenomenology Institute, for 52 years until Houthakker's death. They had three children; Louis, Jan and Isabelle.