In 1966, the average cost of a gallon of gas across the U.S. was $0.32 and today, it is $2.49. A dozen eggs were $0.60 but they’ve only doubled to $1.33. A gallon of milk was $0.99 and today, it costs $3.98. You could send a letter for five cents and now, it costs forty-seven cents.
The average cost of a new car in 1966 was $3,500 and today $33,560. New cars have more features than the earlier models and are nearly ten times more expensive. The median price of a new home was $21,700 and now, is $304,500. (14 times more, and surprisingly, while the median price of resale homes in Wichita is modest compared to nationally, for November of this year at least Wichita’s median new home price was actually slightly higher than nationally.)
Interestingly, mortgage rates are actually lower today at 4-4.5% than they were fifty years ago when they were just under 7%. The rates have been low for long enough that many people have been lulled into believing that they are not going to go up.
Many, probably the vast majority of people in their prime home-buying years, have no experience of mortgage interest rates as “high” as 7%. Yes, rates are a little higher now than seen in a long time and have moved up quickly since the recent presidential election, but in historical perspective they’re still a bargain. Years from now, will you be remembering and comparing what they were back when? Home prices are up from a few short years ago, but not yet as much as might be expected to correspond to the level of demand. How will today’s home prices compare a year from now, and what might be the effect of the combination of a higher mortgage interest rate and a higher price for a home you want? None of us have “a crystal ball”, but for anyone pondering the best time to make a discretionary move, those could be factors of some weight in making the judgment call.