The Boomer Housing Ponzi
"I had an 18% mortgage in the 80s."
Yes. For seven months in 1981 the US 30-year fixed cleared 18%. It was real and it was brutal. It was also brief. Volcker broke inflation and the line fell for forty years. Every Boomer who bought in the 1970s or early 1980s refinanced down through every cycle that followed. Effective lifetime rate: closer to 8%.
Meanwhile the average Boomer bought a house at 3x - 5x annual earnings. Today's first-home-buyer pays 8x - 15x. Boomers sit on the unrealised capital gains of the largest housing transfer in history, funded by policies they voted for.
The "18% mortgage" line is the second pillar of the Boomer Truth Regime. Time to bust it.
Choose your boomer
Income multiples
House Price / Annual Earnings.
What multiple of a year's earnings was a national-median house in any given year. The Boomer cohort bought at single-digit multiples. Today's first home buyer pays 2x or 3x.
The rate they remember
The Peak VS The Lifetime.
The headline mortgage rate by year. The "18% mortgage" was a real spike. It was also a few months long, on a small loan balance, and immediately fell.
What they actually paid
Effective Lifetime Rate.
The transfer
Unrealised Capital Gain.
From the price they paid to the price the house is worth today. Untaxed. Funded by zoning, planning and tax policy the cohort itself voted for.
Method and sources
Where These Numbers Come From.
The methodology for the country currently selected. Click a different boomer to switch sources.
Per-country house-price series, mortgage rate series, and loan conventions all live in the project's housing dataset. Refinance and fix-period assumptions are documented in src/housing/refinancing.ts. Savings parameters live in src/housing/savings-model.ts.
The earnings denominator on this page is each country's full-time annual earnings series taken from the underlying pension dataset. The exact definition varies by country (median for US Census P-43, mean for ABS / ONS / StatCan series). We use "annual full-time earnings" on this page for consistency. The pension page also uses these same series.
References
Sources.
Filter by country. Switch boomer above and the filter follows.