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Comment by al_borland | Hacker News Reader

Definitely not the worst time. While rates are going up, they are still relatively low. Back in the early '80s rates were up around 16%... that's really bad. It can get much worse than it is right now. If it happens to get better, just refinance.

Home prices will also continue to rise over time. Not the at rate we saw over the last 1-2 years, but if someone is looking to buy today and decides to wait until prices come down, they will likely be kicking themselves in 5 years.

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My parents bought their first home in 1981 with a 30-year fixed rate mortgage of 16% interest. Imagine essentially putting a house on a credit card. They refinanced a few times and just kept plugging away at payments their entire working lives. Seemed fine to me, but I was also a kid and have no idea how much stress they actually went through. This was a $65,000 house with two incomes of about $6/hour each. Not sure how that compares to today's market.

$1 in 1981 is equivalent in purchasing power to about $3.22 today: https://www.in2013dollars.com/us/inflation/1981?amount=1

2 incomes * 6 dollars/hr * 3.22 = 38.64 dollars/hr household

65,000 * 3.22 = 209,300

It looks like that would mean about $4k/month after tax [0].

Putting 20% down to avoid PMI would lead to a payment of $1,192, using this calculator [1].

$1,192 / $4,024 = 29.6%

That comes in just under 30% of net pay. The standard rule of thumb is to be less than 33% of gross pay.

$1,192 / $5,417 = 22%

Personally, I prefer using net pay, since that's what you actually have to spend and it's always good to have more room in the budget.

These numbers don't seem unreasonable, and the median household income in 2020 was $67,521 [2], and nearly half the states have a median home price at this price or lower [3].

Here is median income by state as well [4], those in the middle are also around the $65k area to align with the homes in the middle around the $205k area... so it all kind of lines up if people aren't obsessed with leaving on a coast.

This makes it seem like things haven't changed as much as people keep saying.

[0] https://smartasset.com/taxes/paycheck-calculator#UIjlp8sv2w

[1] https://www.mortgagecalculator.org

[2] https://www.census.gov/library/publications/2021/demo/p60-27...

[3] https://en.wikipedia.org/wiki/List_of_U.S._states_by_median_...

[4] https://en.wikipedia.org/wiki/List_of_U.S._states_and_territ...

Home prices vary inversely with interest rates. Rates have been rising and are widely expected to continue rising. If that is the case then home prices will fall over the next few years.

not necessarily. A lot of demand many areas is due to people paying in cash , such as the Bay Area. Also, real estate did well in the 90s despite rising interest rates, same for 2007-2018.

The rate of price increase will slow, but I doubt we'll see them fall. 2008 was the only time that has ever happened.

> Home prices will also continue to rise over time.

Glad to hear I'll be priced out of home ownership for the rest of my life! Hopefully zoomers will be okay with living in tents and vans

There are super affordable places to live if you compromise a little.

Right, the hell is the plan for folks just being born?

How long did it take for you to understand that we are born into a world where all the land is already claimed and must be bought from previous generations? We are born as illegal aliens into this world with no automatic right to be allowed to exist on this planet. The only thing we have is the benevolence of our parents and grandparents. The latter seem to have run out of benevolence, intentional or not.

This is one of the reasons we aren't giving birth to the next generation. Because their parents have no basis to exist and therefore wouldn't want to force another generation to suffer the same fate.

The 16 percent interest rate is not necessarily bad. Back then you could put money in savings account and get 15 percent interest from the bank.

Also the high interest rate means lower house prices, so you could buy a house in cash from savings alone.

> Back in the early '80s rates were up around 16%...

What does the current rate matter though. FED is going to bring the rates back down as soon as they can. America is hooked to cheap money.

Money can only be so cheap for so long, before the house of cards collapses. That's a bad middle to long-term strategy.

American's just need to stop living the high life on borrowed money. Living within one's means makes life much better.

How do you expect that to happen if there is no right to force savers to spend off their savings to eliminate debt?

Also, a 0% interest rate can potentially be stable eternally. An eternally positive interest rate must collapse at some point.

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