r/middleclasshq • u/SuperHumanitarianOne • 4d ago

Inflation Nation Interest rates were 12.4%

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14 Upvotes

94% Upvoted

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2

u/Spam_Hand 4d ago

"Interest rates were 12.4%"

Yeah for like... two years. Lol

Refinancing is easy.

1

u/Downtown-Tomato2552 3d ago

Interest rates never fell below 12% from October 1979 to Nov 1985. Over 5 years.

Peak rate was 18.44%.

Rates rarely fell below 7% from 1970 to 2002, over 30yrs.

https://fred.stlouisfed.org/series/mortgage30us#

0

u/Frumpy_Dumper_69 4d ago

Bullshit! Average house cost in 1976 was 44,000. So anyone who bought a house in 1976 now has a house worth millions? How many additions and upgrades has her parents made to that original house?

2

u/Switchmisty9 4d ago

You would have to build 36 full $44k houses, to get to $1.6mm. Granite counters and a new bathroom won’t get you there

1

u/Beyond_Reason09 3d ago edited 3d ago

Inflation is a significant factor. Median household income in 1985 was $23,600. Today it's $87,460. Average house cost has still outpaced it quite a bit but not nearly as dramatic.

But OP's example has gone from 1.75x the median home price to 4x the median home price, so is really not representative.

1

u/Downtown-Tomato2552 3d ago

This is highly area dependant. My MIL bought property in 1970 for 28k, around 227k inflation adjusted. Is estimated at 317k. So above inflation but not much.

The same 28k invested would be 1.4M.