Quote:
Originally Posted by tgrundke
Mortgage rates averaged 7.5% between roughly 1970 and 2008.
They were over 16% in 1981.
Rates have been in a cyclical decline since 1982, and we're headed into a period of elevated interest rates for longer. Much longer. I'd expect that 5% - 8% will become the norm for the foreseeable future.
Auto loan rates averaged around 9% throughout the '90s, and up until the financial bust in 2008 they were between 6.75 - 7.5%
My point being: 0% (ZIRP) was an anomaly and mistake that created a lot of downstream ramifications.
Higher ("normal") interest rates help the average person because it forces price discovery that makes things like houses and cars more affordable. It significantly reduces big speculative bubbles and it makes everyone more cautious in how they use money. Higher rates incentivize low risk saving. Low rates incentivize spending.
Low interest rates mask problems until they hit a crisis.
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So higher rates makes things more affordable? lmfao. No.
Tell me, how are cars (The average car payment is over $700 right now) and houses (Anyone with half a brain can see the prices are nuts) are so affordable fight now. I'll hold.........
