Breaking News
More () »

Buying a house in the 70s vs. now

It's tough to buy a home right now... but what about in the 70s or even 80s, when interest rates were around 18%?

BOISE, Idaho — "The best time to buy a house is yesterday." That’s according to Boise Regional Realtors President Debbi Myers. She’s not being literal. 

Recent data from Agent Advice puts Idaho in the top ten for most expensive states to own a home in, and she's just saying that the best time to buy a house is already passed. But has it always been this tough to buy a home? Were things really all that easier years ago, say, in the 70s or 80s?

We'll start with the interest rates. At press time, we're at a 20-year high, more than 7% for a 30-year rate. Rates were high for most of the 70s. But back in 1981, those rates peaked, averaging more than 18%! That's more than double what the average rate is now. So, does that mean homes are more affordable now?

Not so fast, says Myers, "The interest rates really do impact people. I know that in the 80s, they were three times what they are now, whatever they were. But also, home prices were $70,000. So, if you're paying 15% on a $70,000 loan, that impacts that payment a lot less than if you're paying 7% on a $700,000 loan, right? It's really out of whack."

Debbi makes a great point, so let's look at more factors beyond interest rates. Consumer Affairs compiled a bunch of numbers from the Census and more. They found that Gen Z dollars today have 86% less purchasing power than when baby boomers were in their twenties in the 70s. The cost of public and private school tuition has increased by 310% and 245%. 

Wages have increased by 80%, but that's a lot less impressive when you learn the average consumer price index has more than quadrupled! And the big stat is home prices. Nationwide, the median home price has gone from less than $25,000 to $416,000!

So, it sure seems like it's harder to afford a home right now. And if you're looking to buy, you already know that. But if you're not looking to buy, the lack of affordable housing is a problem for you too. Why?

Because Myers says local home ownership is good for our economy and good for our community, “It's more than just a home, although that's a big part of it. Lots of studies show that homeowners make great neighbors. They have pride in their property. They're willing to maintain and improve that property. It's good for everyone around them. It's good for them. But it's also the number one way that most American families have of building any sort of multi-generational wealth… So, if we deny people the opportunity to get into that home ownership market, we deny them, to a large extent, the ability to gain that wealth for their families going forward. It's really important."

As always, there is hope. Myers recommended that you first-time homebuyers manage your expectations and don't look for your starter home to be your dream home. Look for a place that's outside your desired neighborhood and needs some fixing up. That way, it should be closer to affordable. But there's still no guarantee it will be affordable. Because, as we've discussed here on Growing Idaho before, even starter homes are harder and harder to find.

Watch more 'Growing Idaho':

See the latest growth and development news in our YouTube playlist:


Download the KTVB News Mobile App

Apple iOS:  Click here to download

Google Play: Click here to download

Watch news reports for FREE on YouTube: KTVB YouTube channel

Stream Live for FREE on ROKU: Add the channel from the ROKU store or by searching 'KTVB'.

Stream Live for FREE on FIRE TV: Search ‘KTVB’ and click ‘Get’ to download.


Before You Leave, Check This Out