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Comment by throwawaymaths | Hacker News Reader

Considering that the previous generation benefitted greatly because of low interest rates (esp. e.g. being able to buy a second home at the same monthly payment due to rate halfings), and those low rates drive up the cost of housing, having the previous generation finance this generations house kinda makes sense, even if its not "fair" for everybody.

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Low interest rates pretty much existed until very recently.

Is this really a “previous generation” thing?

And past generations before also experienced very HIGH interest rates as well as low.

Interestingly, when you compare housing prices, interest rates, and inflation, current housing prices are very similar to what they were in the '80s if you're borrowing: https://matthewminer.name/data/median-mortgage-payments/

Yep it’s been very low since 2010, but looks like it’s been above 5% for possibly more than half the time since 1954, and there was a long stretch from around 1978-1991 where 6% was the minimum, and brief periods where it got to almost 20%. I feel for the poor people who bought houses with an 18% interest rate, I hope every single one refinanced quickly…

https://fred.stlouisfed.org/series/FEDFUNDS

The previous generation? My recollection is that our first mortgage 30+ years ago was around 6%, ARM. That is somewhat lower than it is now, but not lower than the last several years.

(I will add that we got some money from my mother-in-law to get up to a 10% down payment. Less than $10K, I think.)

>was around 6%,

How much was the house and how much do they sell for in your area now ?(approximately)

About $180 K, now about $500 K.

We bought within a year of the market peak, and it was ten or more years before the prices returned to what they had been. At one point early in those years, my sister-in-law, in for a visit, remarked that a lot of the for-sale signs looked familiar from her previous visit. (Around a year.)

“6% of what” is where the answer lies.

yeah? you take out a loan for a toothpick and a couple of dimes at 6% APR?

the problem is inflated asset prices combined with low wage growth combined with high interest rates. now i have some avocado on toast to finish

In the 80s it was 12%, 90s 6%, then in the 20-somethings 3%

Plus dropping interest rates also does cause economies to overheat so there is job creation.

My parents bough in the 70s and their mortgage rate was like 10%. The super low rates era was much more recent and brief.

I wish my own previous generation did that too.

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