Anyone looking for a home is always going to be concerned with what the current interest rate is for acquiring a loan. “How high are interest rates” is a question we get asked frequently, and we can tell you from our years in the industry that while interest rates may be rising at a relatively slow rate (as of September 2022), the situation is still considerably better than it once was, particularly in the 1970s and 1980s.
An excellent recent article on Bankrate.com discusses the mortgage rate history, and why interest rates were much higher over recent decades. As an example, in the 1980s, an ultra-high interest rate of 14.6% led to the U.S. central bank to “manufacture a recession” to bring prices down. The article states that they succeeded in their intention…interest rates dropped approximately 12% in July of 1982.
Imagine a 12% interest rate for a loan being a goal for the government to shoot for, and you might think the current interest rate…just under 5% as this sentence was written…isn’t as bad as the situation could be.
But that’s nothing compared to life in the 1970s. In the 1970s inflation was through the roof, and the Federal Reserve System at one point raised the interest rate to as high as 20%! Imagine purchasing a home with a 20% interest rate on your loan…well, in fact, you’re probably imagining that you wouldn’t be buying a home after all.
How High Are Interest Rates Today? Still Pretty Low By Comparison.
So in reality, while we’re not enjoying the extremely low interest rates of very recent years, the situation is still miles better than it was back when your parents and grandparents were buying their home. “How high are interest rates?” is a question that people were asking in the 1970s and 1980s not to determine how much home they could afford, but whether they should even buy a home at all.
Are you interested in buying a home in the Marlton, NJ area? Would you like to find out more about interest rates and how they can affect your decision? Gina Ziegler and her team would be happy to help you find and afford your dream home in the area. Reach out to us today to set up an appointment, and be sure to Follow our Facebook page for updates on available properties!
