What Happened to Cheep Houses and Cars with High Interest Rates?

By
Real Estate Agent with Broker, Friends & Neighbors Real Estate and Elkhart County Subdivisions, LLC RB14037276
https://activerain.com/droplet/4Sqd

What Happened to Cheep Houses and Cars?

What Happened to High Interest Rates?

When I compare the purchase of my first house and first new car, vs the prices of houses and cars today, I wonder what happened along the way.

My first home, I purchased in 1970.

It was a 1-1/2 story, 3 bedrooms and 1-1/2 baths, full basement, just 2 blocks from an elementary school and 6 blocks from the High School.  It was the ideal home for us. We paid $17,400. but the interest rate was 8.5%.

About the same time, I purchased a 1968 Mustang 2+2 fastback with air conditioning.  It was a demo at the Dealership.  I paid $3,200. I don't remember what the interest rate was, but it was high.

I Realize that wages we a lot lower back then, so everything cost a lot less.

Fast forward to the Present 2016

The price of a comparable home, including the one that I bought in 1970, now sells for over $100,000.

The price of a comparable car these days is around $30,000 or more.

Here's my observation

The interest rate was twice as high in 1970 as it is in 2016, even though the incomes were considerably lower. Why would anyone not take advantage of the low interest rates we have today, knowing that they are going to continue going up? If the Buyers don't act now, they may end up paying thousands of dollars more in interest. Maybe even more than what my first house cost me in 1970 without interest.

 Interest Rates in 1970 - Approx. 8.5%

Interest Rates in 2016 - Approx.  4%

 

My Advice to Buyers - Buy Now and save $$$$$$ in the future

------------------------------------------

If you know someone who wants to Buy or Sell a Home in Elkhart County, St Joseph County,

or surrounding areas, have them call me:

Larry Johnston, 574-304-7577

Friends & Neighbors Real Estate and Elkhart County Subdivisions, LLC, Elkhart, Indiana,

or email larry@larry-johnston.com

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Topic:
Home Buying
Location:
Indiana Elkhart County
Tags:
low interest rates
indiana
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Rainmaker
3,983,519
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

I agree, this is a great time financially to buy a house

Jun 13, 2016 10:10 AM #1
Rainmaker
2,394,983
Evelyn Johnston
Friends & Neighbors Real Estate - Elkhart, IN
The People You Know, Like and Trust!

The prices had to go up because salaries are going up and the more we make the more we spend

Jun 13, 2016 11:06 AM #2
Rainmaker
1,639,809
Bob "RealMan" Timm
Ward County Notary Services - Minot, ND
Owner of Ward Co. Notary Services, retired Realtor

I think you are spot on with your observation Larry Johnston 

Jun 13, 2016 11:12 AM #3
Ambassador
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Ed Silva
RE/MAX Professionals, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

A family that buys a house for themselves makes out better is so many ways.  It offers stability, tax deductions as well as an equity position for the buyers.  It is just a smart thing to do from a financial standpoint.

Jun 13, 2016 11:26 AM #4
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George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Larry I don't remember the interest rate but I paid $27,000 for a 3 bedroom, 1 bathroom house with no basement and a 1/4 acre lot.  That house would sell for 7 - 8 times that today.

Jun 13, 2016 11:26 AM #5
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Noah Seidenberg
Coldwell Banker - Evanston, IL
Chicagoland and Suburbs (800) 858-7917

I hope you hung on to that ride Larry. Did you burn rubber?

Jun 13, 2016 12:58 PM #6
Rainmaker
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Lisa Von Domek
Lisa Von Domek Team - Dallas, TX
....Experience Isn't Expensive.... It's Priceless!

The interest rates need to go up as their artificially low number is working against us.

Jun 13, 2016 01:08 PM #7
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Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

I bought my first car in 83 and my first house in 86.  Both had double digit interest rates.  I have a car note now with zero % interest.  Boggles the mind.

Jun 13, 2016 01:40 PM #8
Rainmaker
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Robert Bob Gilbert
Berkshire Hathaway HomeServices Anderson Properties - Katy, TX
Your Katy TX ( West of Houston) Real Estate Expert

Larry, Excellent advice to potential home buyers as we cannot count on interest rates staying at these low levels.. 

Jun 14, 2016 05:49 AM #9
Rainmaker
4,797,811
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Wise advice, Larry.  It's not going to get more affordable in the future as best I can tell.

Jun 16, 2016 09:18 PM #10
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Rainmaker
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Larry Johnston

Broker,Friends & Neighbors Real Estate, Elkhart,IN
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