quote:
Obviously zero was not sustainable but what should it have been?

I think home ownership is a huge part of the American Dream and rates should be low to accommodate buying/ownership for individuals using it as their primary residence.

I think a lot of younger people have been spoiled by interest rates and don't realize where the current rates actually sit historically.

A lot of boomers and GenXers bought their first homes at similar or higher rates. I converted a construction loan to a mortgage in Oct 99 and our rate was right at 7% and we were very happy to get it especially since it was a jumbo.

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Posted by Themicah86

Member since Jun 2023

1320 posts

Posted on 5/12/24 at 1:04 am to Obtuse1

But when you pair that interest rate with inflation it makes it very tough to do. I live in what i would say is a mostly blue collar neighborhood, lot of teachers, police officer type salary people live here if I had to guess. I bought my house for 300k in 2019. With inflation and a few minor improvements (new siding, master bath remodel, new pool heater etc.) The comps have my house value at over 450 now. I live in a dfw suburb so property taxes are high as well. With the inflation, property taxes and interest rate, my house would probably be close to a 4000 per month mortgage for a first time home owner loan with the minimal down payment. This house shouldn't cost that much.

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Posted by Jabstep

Member since Jul 2014

2173 posts

Posted on 5/12/24 at 6:46 am to Obtuse1

I hear this trotted out all of the time but the truth is, the cost of construction and the percentage of your household income was DRASTICALLY lower when people were borrowing at 8%.

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