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
Because we have substantially more debt on the individual level, the corporate level, and the government level. Homes cost substantially more than they did in the past, and compared to average wages are like 3-5x more expensive than they were back then.
For Example:
In June 1990 the mortgage interest rate was 10.19% and the medium home price was $117,000. That is am $1,182 mortgage payment, and the total cost of the loan was $375,793.
Today the mortgage interest rate is 6.96% and the medium home price is $436,800. that is a $3,248 payment, and a total loan cost of $1,042,223, after 30 years.
The price of the home has tripled, even with a lower rate, meanwhile the average wages have not tripled in that time. And if we ended up at the same rate from back then, the same home would cost another $400k, over the course of the loan.
Latest Answers