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 email@example.com