5 ms·

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

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.

camillomiller 3y ago
I wish my own previous generation did that too.
duxup 3y ago
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.
- mminer237 3y ago
  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/ https://matthewminer.name/data/median-mortgage-payments/
- dahart 3y ago
  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 https://fred.stlouisfed.org/series/FEDFUNDS
dhdudbd 3y ago
[flagged]
- cafard 3y ago
  >> a violation of human rights In general, hospitals do want parents to take their offspring home from the nursery after a day or two.
  - dhdudbd 3y ago
    [flagged]
- JumpCrisscross 3y ago
  > it's a violation of human rights. people receiving shelter based on who gave birth to them This hyperbole kills reasonable discussion. Right to shelter != right to own property, and any property at that.
  - dhdudbd 3y ago
    [flagged]
    - JumpCrisscross 3y ago
      > people should live in their tents and be happy. got it. Again, hyperbole. Plenty of countries have housing models that preclude private ownership. They're still fulfilling their obligation to shelter. Most Americans do not face a lack of shelter, certainly not those considering purchasing a house. Housing cost is a serious issue in our cities. But it's not at the level of violating human rights, not by a long shot.
cafard 3y ago
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.)
- lawlessone 3y ago
  >was around 6%, How much was the house and how much do they sell for in your area now ?(approximately)
  - cafard 3y ago
    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.)
- ofjcihen 3y ago
  “6% of what” is where the answer lies.
- dhdudbd 3y ago
  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
- throwawaymaths 3y ago
  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.
tootie 3y ago
My parents bough in the 70s and their mortgage rate was like 10%. The super low rates era was much more recent and brief.

camillomiller 3y ago

I wish my own previous generation did that too.

duxup 3y ago

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.

mminer237 3y ago
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/ https://matthewminer.name/data/median-mortgage-payments/
dahart 3y ago
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 https://fred.stlouisfed.org/series/FEDFUNDS

dhdudbd 3y ago

[flagged]

cafard 3y ago
>> a violation of human rights In general, hospitals do want parents to take their offspring home from the nursery after a day or two.
- dhdudbd 3y ago
  [flagged]
JumpCrisscross 3y ago
> it's a violation of human rights. people receiving shelter based on who gave birth to them This hyperbole kills reasonable discussion. Right to shelter != right to own property, and any property at that.
- dhdudbd 3y ago
  [flagged]
  - JumpCrisscross 3y ago
    > people should live in their tents and be happy. got it. Again, hyperbole. Plenty of countries have housing models that preclude private ownership. They're still fulfilling their obligation to shelter. Most Americans do not face a lack of shelter, certainly not those considering purchasing a house. Housing cost is a serious issue in our cities. But it's not at the level of violating human rights, not by a long shot.

cafard 3y ago

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.)

lawlessone 3y ago
>was around 6%, How much was the house and how much do they sell for in your area now ?(approximately)
- cafard 3y ago
  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.)
ofjcihen 3y ago
“6% of what” is where the answer lies.
dhdudbd 3y ago
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
throwawaymaths 3y ago
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.

tootie 3y ago

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