Menu

Home › Forums › Financial Markets/Economics › Are savers doomed? › To put housing cost into

January 9, 2015 at 10:44 AM #781793
an
Participant

To put housing cost into historical perspective, lets take this house for example: http://www.sdlookup.com/MLS-150001489-17050_Edina_Ct_Poway_CA_92064

In 1989, it was sold for $625,000. The mortgage rate back then was ~9%, which means the monthly payment was $4000/month.
In 2014, it’s asking for ~$1.2M. The mortgage today is ~3.750%. Which means the mortgage is ~$4500/month.

So, over 25 years, the monthly payment difference between someone who bought that house today vs 25 years ago is only 12.5%. That’s much less than the rate of inflation & income growth over the last 25 years. So, it’s much cheaper to buy today than it was 25 years ago.