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Economic Shockwave: Envisioning 2025 with 1982-Style 18.6% Mortgage Rates
30Y in 30D • Y19. If mortgage rates rise anywhere close to 1982 levels, it makes the median-priced home 100% unaffordable to the median income U.S. family.
Related and recent articles
(Full list of “30 Years in 30 Days” Series articles at bottom of this article.)
• 30Y in 30D, Y18: U.S. Mortgages in 1982 vs. 2021 vs. 2023 — the Good, the Bad, and the Ugly
• 30Y in 30D • Y16: The Total Cost of Ownership of Your House
• Kickstarting “30 Years in 30 Days” — Decades of Mortgage Wisdom in 1 Month
• Has U.S. Healthcare Really Become a Mob Protection Racket?
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Median house prices were lower back in 1982.
$69,300 in 1982 vs. $420,000 today.
That’s dramatically lower, actually.
But 18% mortgage interest rates in late 1982 meant that even with the far lower median house price of $69,300, a homeowner’s monthly payments were high, and “Total Interest Paid” over the lifetime of the mortgage was shockingly high…even by today’s standards.
In the previous article (30Y in 30D • Y18. U.S. Mortgages in 1982 vs. 2021 vs. 2023 — the Good, the Bad, and the Ugly), we saw what it was like in 1982 when 30-year fixed mortgage rates went as high as 18.63% with those $69,300 median house prices.
And it was tough for those 1982 homebuyers. Really tough.
But that made me wonder….
What would the combination of (1) the 18.63% interest rate of October 1982 AND (2) much higher median house prices in the 2020’s look like?
What would that combo mean for U.S. homebuyers in, say, 2025 if all the real estate pundits are wrong — cataclysmically wrong — in predicting “lower mortgage rates” for 2025?
