I was interested in how it was possible so did a quick Excel calculation of monthly payment.
For a 100 000 USD home without a down payment, and a 10 year loan you'd pay 1738 USD per month for a total of 208 500 USD. I've used 17% yearly interest rate.
=PMT(0,17/12;10*12;100000)
Today if you used 3% interest rate, your monthly payment would be 965 USD for a total of 116 000 USD.
Buying homes on loans was insanely expensive in 70s-80s but probably the growth of prices of homes made up for it.
Ah so the problem is that the supply of houses is very limited and prices are dictated by amount average house buyer for specific house can afford. It makes sense.
This is another proof why government shouldn't intervene into the market by offering loans or subsidies. Usually what they end up doing is completely opposite of the intention. Instead of subsidizing young buyers to buy homes for less cost, they end up subsidizing the owners of the houses.
For a 100 000 USD home without a down payment, and a 10 year loan you'd pay 1738 USD per month for a total of 208 500 USD. I've used 17% yearly interest rate.
=PMT(0,17/12;10*12;100000)
Today if you used 3% interest rate, your monthly payment would be 965 USD for a total of 116 000 USD.
Buying homes on loans was insanely expensive in 70s-80s but probably the growth of prices of homes made up for it.