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The 14% mortgage rates came in part from the law of small (big) numbers. 14% of $35,000 is not that much money compared to 3% of 700,000
by aaahayatav 6y ago
The 14% mortgage rates came in part from the law of small (big) numbers. 14% of $35,000 is not that much money compared to 3% of 700,000
- arcticbull 6y agoSort of, right, because after inflation 14% of 35,000 ($233,463.53 in 2021 dollars @ 14% = $32,620) is still a lot more than 3% of 700,000 ($21,000).
- missedthecue 6y agoBut your typical home did not cost $35k then, and your typical home does not cost $700k now
- aaahayatav 6y agoWhile prices vary wildly from city to city and type to type, I'd like to show you the King County price index that shows the trend in housing prices since 1975. https://fred.stlouisfed.org/series/ATNHPIUS53033A https://fred.stlouisfed.org/series/ATNHPIUS53033A
- arcticbull 6y agoIndeed, you're looking at supply not keeping up with demand due to artificial constraints imposed by King County.
- aaahayatav 6y agoAgreed. These artificial constraints are playing out in desirable locations everywhere in our country, as compared to say eastern Kentucky or Ashtabula, Ohio. While incomes have indeed gone up in real terms, mandatory living expenditures for all Americans who don't consider a park bench to be shelter have also gone up in real terms in a more than proportional manner.