Having served the Thurston County real estate markets since the 1960s, our company has been through a great many market cycles. Over those 46 years we’ve used a lot of tools to help serve our clients. Recently, we ran across a mortgage payment table book from 1985.
Books like this were standard issue in those days. They listed various interest rates and set out the monthly payments at various loan amounts. While today’s “apps” have replaced the book, it was interesting to revisit this bit of history.
Many people recall the high interest rates in those days. The highest rate in the book is 17%. Just a few years earlier, in 1982, we recall rates were even higher. However, what we found most intriguing was the lowest interest rate stated inside the book: 6%.
I can imagine the debate back in 1985 the book’s publishers must have had – asking, “How low do we go?” It is easy to picture some asking why even list rates in the single digits. After all, in 1984 the average rate was nearly 14%. Single digit rates hadn’t been seen since 1978, and even then they were slightly below 10%. Settling on 6% for the low rate must have been a great debate, indeed.
The first-time buyers of today can hardly recall interest rates higher than 6%. With today’s rates much lower than 6%, it is a uniquely good time to purchase a home. Even as rates rise over the next couple of years, borrowing will still be inexpensive relative to historic averages.
However, higher rates do mean less buying power. People contemplating a move over the next year or two might consider how rising rates will impact their desired move. With the housing market beginning to improve, we expect to see both higher rates and higher home prices. That combination means today’s home buyers will be happy they locked in when they did.
