If you owned a home in the 80’s you can’t forget the mortgage interest rates that gouged your bank account. Rates averaged almost 13% over that decade, brushed up against 19 percent at one point and bottomed out at 10. Ouch! As homeowners, our money didn’t stretch very far and clearly we could have used it to improve our clothing budget. Or personal grooming options.
The astronomical mortgage rates back then probably explained why we looked like this. 🙂
It’s always interesting to me to look at how much home you can buy today compared to a time 25 years ago. I’ve used numbers below that have been adjusted for inflation to make the comparison clearer. In 1989 when 30-year fixed interest rates were at 10%, a mortgage payment would have been $1572 for a home worth $179,461. In 2014 with an interest rate of 4%, a mortgage payment would be $995 for a home priced at $208,500.
Thankfully, we can buy much more home today than ever before. The 30-year fixed mortgage rates we’ve been enjoying for the past few years (3 and 4%) were UNHEARD OF until only 5 years ago. Industry experts think that interest rates will rise by less than a percentage point over the course of 2015 making home buying still very attractive!
Posted on 02/18/2015 at 10:30 AM
