Born in New York City, he completed preparatory studies and attended Collegiate Institute in New York. During the Mexican-American War, Houghton enlisted in the First Regiment, New York Volunteers, in June 1846. He arrived in San Francisco, California in 1847 with the rest of his regiment after sailing around Cape Horn. The regiment garrisoned Santa Barbara, before capturing the city of La Paz in Baja California. He was honorably discharged as a lieutenant at Monterey, California, in October 1848.
Houghton then proceeded to mine for gold during the California Gold Rush, and after about 6 months of mining, he moved to San Jose and entered various commercial businesses. He served as the deputy clerk of the Supreme Court of California in 1854, the same year he was elected to the San Jose Common Council; he was elected the fourth mayor of San Jose, and served from 1855 to 1856. He studied law and was admitted to the bar in 1857 and commenced practice in San Jose. In 1859 he married Mary Martha Donner, a survivor of the Donner Party; she died a year later, most likely from complications related to the birth of their only child, also named Mary. In 1861 he married his late wife's first cousin and fellow Donner Party survivor Eliza Poor Donner, with whom he had an additional seven children.
During the Civil War he was commissioned as a captain and promoted to lieutenant colonel, and served successively as inspector and ordnance officer. After the war, he was elected as a Republican to the Forty-second and Forty-third Congresses (March 4, 1871-March 3, 1875) and was the chairman of the House Committee on Coinage, Weights, and Measures for the Forty-third Congress. He was an unsuccessful candidate for reelection in 1874 to the Forty-fourth Congress.
The Donner-Houghton House, a historic building in downtown San Jose, was built by Houghton in 1881. The building was placed on the National Register of Historic Places in 2002. A number of proposals were made to either restore or renovate The structure was almost completely destroyed by a fire on the morning of July 9, 2007.