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“Elevated mortgage rates have helped keep the U.S. housing market in a sales slump since early 2022, when rates started to climb from the rock-bottom lows they reached during the pandemic.”
For anyone older than about 40-45, these current rates just represent a reversion to the long-term mean. I’ve had as many home loans over 6.5% as under.
In the early 80s rates were well over 10% and declined steadily through the 80s and 90s. The first time rates dipped as low as 6.5% since the late 70s was 2002, and they stayed in that 6-6.5% range until 2009 through the “housing boom” of the 00s. Rates were below 5% for only 10 years from 2011-2020.
The huge issue with housing affordability not mortgage interest. It is the massive size and price of new homes today. Even smaller production homes are close to 2,000sf, which is twice the size of the postwar “used” starter homes many Boomers were buying in the 80s. Even new suburban starter and move-up homes back then were small by today’s standards.