So mortgage interest rates are 5% now?????

[spanone]

When my wife and I were looking to buy our first house, Reagan was president.

The mortgage rate was 16%.

[spooky3]

1. Ditto. I remember it well! Nt

[Kaleva]

2. Mine was 21%. I was 22 when I bought my 1st house.

[JohnSJ]

4. That was most likely under Carter when Volker cranked interest rates up to stop inflation

[Kaleva]

11. Reagan was President at the time. 1981 or '82

[JohnSJ]

13. Ok, but it started when Carter was President, and went into the 80s

[Kaleva]

15. You very well could be correct.

[JohnSJ]

19. In 1979 President Carter appointed Paul Volker to head the federal reserve

He then started hiking interest rates under Carter to around 17%

They went even higher under reagan

I am pretty sure that was the scenario

My first interest rate for a house was 9 and 7/8 % before Volker started increasing interest rates to unreal levels

1978

[JohnSJ]

3. This is why I despise much of the media, they conveniently put things in perspective. Volker

started cranking up interest rates to curb run away inflation during Carter

The low Interest rates were due to the republican financial implosion under bush W, and republican deregulation of the financial industry with risky and predatory loans and other risky maneuvering

The pandemic hit, and that is why the low interest rates continued

[Irish_Dem]

5. Remember land contacts to buy a house?

Mortgage rates were too high so people resorted to this.

[Johnny2X2X]

6. Heck, I remember in 1994

We bought a house and got a 6.8% interest rate and all of our friends and family were jealous.

5% interest rate on a home is still fantastic. We've got 3.25% on our current home and it is awesome, we were able to refinance for 3.25 when the value was high enough that we could eliminate PMI altogether. My mortgage payment is less than half of what rents are right now for similar homes.

[PoliticAverse]

7. Have you seen the interest rate they're paying for savings now? n/t

[FoxNewsSucks]

10. is it above a half percent yet?

[Amishman]

8. Median house price was 3x median income in the 80s, it's close to 7x now

So while interest rates are much lower, house prices have soared. This has been a huge benefit to those who bought in the 80s, and very harmful to those buying now.

Why so harmful to those buying now? Harder entry for first time buyers.

Low house prices but high interest rates meant that 20% down for a conventional mortgage was a lot lower bar. While buyers now might have some offset with paying more principal vs interest, the higher house price means the amount of down payment money needed is far higher relative to the resulting monthly payment.

And many buyers are back over 5% now. I work in finance, and the lender rate sheet I have handy a 700 credit score, 20% down, and no points would be at 6.625%. Paying 2 points puts you still at 6.125%

[brush]

9. I remember that time. Boomers didn't have it so easy after all.

Next time the war of generations breaks out on DU, cite this statistic.

[Novara]

12. I refinanced when the interest rate was well under 3% in the midst of COVID

I am paying less per month and my mortgage gets paid off 10 years quicker.

[gab13by13]

14. I got a deal in 1975, 8 1/8%.

[JohnSJ]

22. 1978 for me, 9 and 7/8%

[GoCubsGo]

16. While you were paying 16% on your mortgage,

I was getting WAAAAAAAAAAAAAYYYYYY more than the 0.2% interest on my savings account than I'm getting now. If you invested in a CD, you were getting well over 7% during much of that time. Having to pay a little more to borrow will suck, but it's nice that investments on savings will be more worthwhile now. It's not like the 1980s, but it's a start.

[SomewhereInTheMiddle]

20. The positive side ...

I hate high loan rates, but actually being able to make money by saving is not a bad thing. It is too bad the two things are interconnected.

[progree]

17. June 1980 - Assumed a 9% mortgage that was 2/3 of it, 1/3 financed by a 12% contract for deed

(the contract for deed had a 3 year balloon which scared me to death, but managed to pay it off in 3 years). That's all after putting about 25% down. Anyway, quite a deal. The prevailing mortgage interest rate then was about 15%.

[DenaliDemocrat]

18. Lol. I paid 12%

CDs gave a 6% return. We are actually returning to a little more normal economy

[Stinky The Clown]

21. In late 1981, they were as much as 21%

[Chautauquas]

23. Six years ago

I bought a house and got an interest rate of 3.625%.