I am surrounded by boomers saying this that in their day interest rates were at 15% and we have it easy! I’m also surrounded by the younger generations saying this is ‘not the same thing’
Explain to me the reasoning…
In: 233
I mean, comparing 2021 to 1980. Median household income in 1980 was $21k, with the average home costing $47k. In 2021 those numbers were $71k and $346k. This is average too, the east and west coasts are significantly more out of whack. The same interest rate on a home 5x your salary will have a much bigger impact than one that is 2x your salary. Its not just houses but everything is more expensive, so people now are much more sensitive to interest rate changes.
Additionally we basically went from having historically low interest rates to historically average interest rates. Meaning people with these low fixed rates are not putting their homes on the market, since even buying a home that is the same price will increase your payment significantly. This keeps homes at elevated prices due to low supply. Its al a bad feedback loop right now.
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