A lot of buyers are taking low mortgage rates for granted, forgetting the historical perspective of where rates came
from in the early 1980′s. At that time in US history the country had significant inflation and interest rates went up to nearly 17%. In 1981 the monthly payment on a $100,000 loan was $1,418 a month, compared to $543 at today’s interest rate of 5.1%.
In real dollars a drop in interest rates of about 12% cut the monthly payments by 62%. Think about the impact on home-ownership if all our monthly mortgage payments were to triple. The reality is that although in the short term home prices have fallen, the impact of lower interest rates creates real perspective on the long term cost of home ownership is right now.
The
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WOW, I didn’t realize that was what it was. I think it a good thing that they are cheaper to pay out. It puts less stress on the home owner.
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