The pundits remind us regularly that mortgage rates are historically low, and this colorful graph shows it clearly.  But home buyers are frustrated because any benefit has been offset by today’s higher prices.

Year
Sales Price
Loan Amount
30Y Mortgage Rate
Mortgage Payment
1984
$431,250
$345,000
13%
$3,816
1990
$543,750
$435,000
10%
$3,817
2002
$717,500
$574,000
7%
$3,819
2019
$1,000,000
$800,000
4%
$3,819

Lower rates today enable buyers to afford a house that is 2.3x more expensive than in 1984 and still have the same monthly payment.  But home values have appreciated more – the December San Diego Case-Shiller Index is 4.6x higher.

It’s worse in the higher-end areas too.

Back in the day, we were selling the PB crackerboxes for $100,000 – $150,000.

Now look at the prices:

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