Dear Friends –
Ever hear of the stories about when your parents or possibly grandparents bought their first home? Something like: “I got my mortgage rate locked in at 12% and I thought that was a good deal at the time.” Truth is, this probably was their reality. No, these claims weren’t exaggerated as was walking 5 miles uphill (both ways) bare foot in the snow to school was. Mortgage rates in the early 1980’s did top out around 18%. Although, my experience as a Mortgage Lender started out the day I graduated from Grand Valley State with an economics degree in 1987, I recall that the average 30 year fixed mortgage rates were around 10% to 10.50% at that time.
Just for fun, and as a comparison as to what it was like as a 1st time home buyer in 1984, compared to 30 years later in 2014, you might find these graphs very interesting in regards to:
1. Interest rates 1984 vs. 2014
2. First Time Home Buyer’s affordability index 1984 vs. 2014
3. Mortgage payments as share of income 1984 vs. 2014
4. Unemployment among 24 – to – 25 year olds 1984 vs. 2014
These graphs are taken from statistics compiled by: the National Association of Realtors, Freddie Mac, and the Bureau of Labor Statistics and were presented in a recent Bloomberg article, from July 11th, 2014 by Lorraine Woellert. To see these graphs click here. Home Buying 1984 vs. 2014.