3 ms·
Probably not a sympathetic audience here, but if you look back more than the relatively short timeframe of 20 years things are far more cyclical. I grew up with
by DowagerDave 3y ago
Probably not a sympathetic audience here, but if you look back more than the relatively short timeframe of 20 years things are far more cyclical. I grew up with double-digit interest rates, so while everything was cheaper, financing was far more costly. The generation that's now looking to buy a house grew up with a financed lifestyle (via their parents) that was essentially interest free and not sustainable in the long term. I see a lot of people who believe their first home should look a lot like their family home: new, desirable location and affordable. This has never been realistic.
- testval123 3y agoHouse prices went down in the 80s (although were still quite unaffordable). Additionally, those who bought in the 80s got the ride the gravy train of lowering rates over the decades which massively boosted prices and allowed them to refinance.
- jwells89 3y agoHigh interest on its own isn’t great but in some ways can be easier to grapple for first-time buyers, because while it does make for larger monthly payments it doesn’t raise the bar to entry the same way that high prices do with down payments. Low home prices with high interest can be manageable, as can high home prices with low interest. High prices and high interest is a tough combo. On top of this, even if prospective buyers are considering less desirable neighborhoods further from place of work, the used car market is still a mess with anything that doesn’t already have a foot in the grave (and thus, is a reliable efficient commuter) carrying an inflated price, which chips away at the savings that can be had there.