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You need to account for inflation. Dollar value in 2001 and 2022 is not the same. CPI today is ~295 vs ~175 in 2001, so while nominally today's monthly payment
by extesy 4y ago
You need to account for inflation. Dollar value in 2001 and 2022 is not the same. CPI today is ~295 vs ~175 in 2001, so while nominally today's monthly payment is higher, it is not higher in terms of its purchasing power.
- aschearer 4y agoI adjusted for inflation in my numbers above. The median 2001 home cost $180,000 in 2001 dollars. $300,000 in today's dollars. Someone who could purchase a median home in 2001 cannot purchase a median home in 2020 without increasing their monthly cost. Using Google's mortgage calculator and punching in those numbers at 7%: $1,996 / month in 2001 vs $2,972 / month in 2022 That's in today's dollars, accounting for inflation. Almost 50% more. Feel free to point out an error in my math.
- extesy 4y agoDidn't know you already inflation-adjusted your numbers. So I looked up the prices, mortgage rates and CPI in 2001 and 2022. I think your math is correct.