r/funny May 04 '21

But i like what i have okay?

Post image
104k Upvotes

View all comments

6k

u/mattdotnet May 04 '21 edited May 04 '21

My mom bought her house for $120k in the 90's. It just got appraised for $600k. Me and my wife make under 100k and either have to move away from both our families or rent until we die. It's pretty fucking cool.

1k

u/37yearoldthrowaway May 04 '21 edited May 04 '21

$120k is worth about $260k in today's dollars adjusted for inflation. Not only that, the average mortgage interest rate in 1990 was 10.1%. With today's rate around 3.0%, the monthly mortgage cost of a $120k house in 1990 would be roughly equivalent to a $525,000 house today.

Edit: This doesn't even factor in the decent increase in square footage of most houses today verse 30-40 years ago. I'd argue that for anywhere other than VHCOL areas (SF/Seattle/NY), that the price per square foot is "relatively" cheaper than it was back then, adjusting for inflation and current interest rates. Unfortunately, it's also impossible to buy a new 1,200 sq ft house anymore because they just don't build them that small.

28

u/Youknowimtheman May 04 '21 edited May 04 '21

The stupidly low rates are part of the mechanism driving housing prices up. See also: first time homebuyer credits, unregulated foreign investment, not enough building, lack of taxes on unoccupied homes.

2

u/eohorp May 04 '21

Investment property loans being approved based on projected rental income is a big one right now. Sure you can only afford $1k/month if your investment property sits empty, but if you keep it rented you can afford $3k/month so here's your loan! Let's package this mortgage and sell it off before this guy has a few bad months!

0

u/UtopianLibrary May 04 '21

I would honestly rather pay 7-10% interest rates on mortgages if it meant more individual people could buy a house instead of developers and rich folk using it as an investment.