https://preview.redd.it/rumfhodjd2ea1.png?auto=webp&v=enabled&s=498840d8d473b0ef5a0f81596f6189adb8145bae
Mortgage rates over the past 50 years. Imagine going back to 1980s style mortgage rates of 16%
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Yeah, id buy those times again for a dollar.
God things were awful when one parent could stay home.
I’d take a 16% mortgage rate on a 30k mortgage any day of the week.
Sure but a house cost 50k
Ah yes the terrible 1980s when my two parents had to wait until their mid 20s to afford a house that’s worth millions today on their single income. Times sure were tough!
Imagine being in the 2020s with 2% rates
The world was a better place pre 2001
Yeah but average incomes were typically 25% of the total house costs. Rents were typically one week of income.
The average house cost in the USA 2022 is 543,000 and the average income is … Wait for it … 78,813$ . See the problem isn’t the interest rate. To really afford a house average incomes need to be 136000 a year
16% interest on the average house today would be 6k/mo.
In 1981, it was $1424/mo.
1981 average income of $22,390
2022 average income of $54,132
So home prices up 4.25x while wages up 2.4x
Give us 1980s house prices and availability, then we can talk.
Would love 80s rates with 80s prices, but we got 90s interest rates with 2020s housing prices.
Is rather pay 16% on a $40k house than 2% on an $800k house.. just sayin..
I don’t know. What’s 16% of 48,000 vs 3.5% of $416,000
(Spoiler 16% over a 15 yr loan is $72,000 in interest vs $260,000 interest on a 30 year at 3.5)
I just took average home value 1980 and 2021 so it’s not quite a linear comparison.
Except that house prices were 1/4 of what they are now so the monthly was still probably cheaper.
Running some quick math.
A 200k house in 1985 at 16% is a mortgage payment of 2500 or so.
That same house costs a million bucks now at 3% which is over 4000. And let’s not even consider the 20% down payment to get that. Which was 40k in 1985 and ungodly now.
Anyone that did not refinance in 2021 is a fool.
the 1980s weren’t bad it was really a booming period. the average family standard of living was supported by 1 income and they were able to afford homes without 2 parent income and because you needed to be credit worthy to buy homes that’s why the interest rates were very high. it was such a boom that in the beginning of the 1980s the median home price in the US was about $47,000 and at the end of 1980s it was $93,000 basically doubled.
2% here on my 375k mortgage 15 year note! Stoked! Refinanced down from 5.75% during covid!
First mortgage was at 10.5% with a Georgia 2 point reduction for a first-time buyer! The current rate is 2.25 30 yr fixed. My how times have changed!
I’d happily pay 16% when houses cost 50k. People are so dumb. So happy about a 2% rate. Who cares you paid 600k for a 175k house
You couldn’t do that today though. Very different situation.
This charts are bs without price comparaison….
Yeah but hoses in the 80s were less than a new car now.
Sure if a house was nine dollars make the mortgage rate whatever the fuck you want
My parents first mortgage was 18%
Al Bundy could afford a 16% interest rate on a shoe salesman’s wages because that house was probably like 20k
Heck yeah with all the coke that was flowing everywhere back then (not laced with fentanyl or other shit like today might I add) I’d be so on that I could work 20 hours a day to pay that bank note easy. Plus as everyone else said houses were priced reasonably then unlike today.
At least you could support a family working the dumpster behind wendys back then…
Imagine having those hose prices.
Yeah but in 1980 houses cost 50k
80s houses were 42k…lmao…someone didn’t count that factor in
I’ll gladly imagine only having a $40,000 mortgage. Less than a new Volkswagen.
But it was all tax-deductible.
Yeah, but house price was cheaper then, dip shez