Why are mortgage rates such a big deal?

[Powderjunkie]

Another useful chart.

great chart!

 

[Koolau]

A. If everything just kept up with inflation (CPI change), the price and the taxes would be 35% higher in 2023 than they were in 2013. But so would salaries of the people who are looking at that type of house. https://www.minneapolisfed.org/abou...flation-calculator/consumer-price-index-1913-

B. The 30 year mortgage rate in 2013 was closer to 4%, and the average has been in excess of 7% over the past 40 years or so. 3% mortgages are an anomaly. https://themortgagereports.com/61853/30-year-mortgage-rates-chart#loan-purpose

C. Who starts out with a 4 BR home? And when? I never lived in a house when I was a child, just trailer parks and cheap apartments. And the young wife and I did not buy a home until I was 34, after 9 years of marriage. People need to adjust their expectations.

And I submit that the low interest rates of yesterday are a significant reason that prices of RE have sky rocketed. I look for them to come down IF lenders can not maintain their higher lending rates. People with appreciated RE can "change" houses, but new buyers are being shut out. When the dust settles, I believe either rates will drop or prices will drop. And I'll put every dime I earned as a greeter at Walmart on it.