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In 1989 home mortgage rates were 18%. I got a mortgage at 16% by paying an extra 2% of the mortgage balance up front in addition to the 30% down. We been living in the era of nearly free money and it surprises me it took this long to end. 6% seems pretty normal to me.
Biden’s America: can’t afford homes, can’t afford eggs.
People have no historical or macro perspective – especially those that complain all the time. The whole period between 2000 – 2020 was an anomaly. For the 30 years prior to the financial crash in 2009, the average mortgage rate was significantly above 6%, 8-10% was probably the average. It was the financial crisis in 2009 that drove the need for lower interest rates (thus lower mortgage rates) to assist in economic recovery.
Same can be said for Inflation it was incredibly low beginning in the early 2000’s because of massive gains in technology and automation and major shifts to low cost offshore sourcing (Political decision in the decades before that contributed more to the growth in offshore sourcing than the President at that time). While costs remained flat for consumers during that time, costs were actually going down for the producers/importers who were reaping huge profits by pocketing the lower costs. But that party is over. Apart from the supply chain disruption and pent up demand driven by the pandemic (which fueled higher costs), the huge gains from technology and automation have slowed down and politically off-shore sourcing has become a political football. Make no mistake about it, the increase in tariffs were 100% paid by American companies and consumers – not by the overseas manufacturers and will continue to affect pricing until lower cost alternatives can be found.
Blaming the President (whoever it is) for everything is simple minded. By the way, I can assure you that gas prices are going to go up over the next few months and its not because of the President but mostly because of increased summer demand (barring other unseen world events). But those who simply don’t know that will blame the President.
Mortgage rates aren’t what are preventing those that can’t afford to buy from buying.
Dan is right. Consumers are spoiled by the season of artificially low rates. We old timers remember much higher rates.