Watching home prices go up the past few years while interest rates have too has made Millennials complain that the Baby Boomers had it easy when buying a house. Yes, prices were much lower for that group but a recent analysis by Realtor.com looked at not only home prices and interest rates but also average income and found the boomers had it worse.
In 1980, just as a cohort of boomers entered the market hoping to buy their first homes, typical mortgage payments soared. "Amid rampant inflation, home prices had shot up more than 60 percent in four years, and mortgage rates surged to their highest level in recent memory. Mortgage rates topped 16 percent (according to a UPI article sited) and the average monthly home loan payment jumped 34 precent from a year earlier.," according to the Realtor.com article.
It goes on to say, "During the years when boomers turned 30, the share of median household income needed to make the typical mortgage payment averaged 33.2 percent, the highest of any living generation. In contrast, millennials on average faced the lowest mortgage burdens, thanks to a decade of ultralow interest rates following the Great Recession.
For millennials turning 30, the typical mortgage burden averaged just 22.5 precent of median income.
That’s lower than the 25.8 percent average mortgage burden faced by Gen X, and even edges out the 22.6 percent share paid by the silent generation, based on the available data. (The youngest millennials won’t turn 30 until 2026, and reliable mortgage rate data goes back only to the early ’70s, covering just the tail end of the silent generation’s first home buying experience.)" Click here to read the entire article.