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Interesting, I've never seen that stat before. one problem is that inflation is a lot lower than before. If you borrowed a house in the 70s/80s you'd pay less e
by x87678r 6y ago
Interesting, I've never seen that stat before. one problem is that inflation is a lot lower than before. If you borrowed a house in the 70s/80s you'd pay less each month but after 10 years that payment would be negligible, where now it still takes a big chunk out of your pay.
- kevstev 6y agoI have actually wondered if this is where a big chunk of our parents perceived security came from- if I buy a house, but in 4 years I am making 20-30% more, and in 20 years I am making twice what I paid for the house, life feels pretty comfortable. We have low interest rates today, but we aren't inflating out of our debt like generations past did.
- ChrisLomont 6y agoBut in the 70s/80s mortgage rates were ~15%, compared to ~ 3% today. So you still spent a significant amount of money on a mortgage.
- x87678r 6y agoYes but as above even with high rates the payment was lower.
- ChrisLomont 6y agoInflation adjusted housing cost per square foot has remained remarkably constant for decades. Thus, given higher interest rates over the same fixed timeframe, relative payments were higher.
- x87678r 6y ago> Inflation adjusted housing cost per square foot has remained remarkably constant for decades I think you mean for the first year. With higher inflation everyone got big wage rises each year which quickly made mortgages more affordable. Now wages are stagnating so even 10 years later most people dont earn much more than when they first took out the mortgage.
- ChrisLomont 6y agoCare to show me these big wage rises each year?