OT. Fed Raises Rate 3/4%

[Dean Hoffman]

It's the largest rate hike since 1994.

[Ed Pawlowski]

Two of my granddaughters are looking at home buying.

One had construction start on their house this week and they are locked in on a decent mortgage rate.

The other wants to save more and possibly pay cash. While that sounds good, it is not. I asked them about it two years ago when mortgage rates were <3%. In that time, they have paid rent for two years so far, the price of the house they would like to buy has increased by at least $125,000. So they continue to pay rent while playing catch up on saving. Unless the bubble bursts they are paying a LOT more.

Bought my first house in 1966 at 5.25%. Moved to another state in 1981 and got a "good" rate at the time of 15% and refinanced a few times.

[Big Al]

And meanwhile apartment rent rates are going up huge amounts. 100's + a month more. So buy the house and pay 100's more in mortgage or stay in the apt and pay 100's more in rent.... hummmmmm.

[Dean Hoffman]

Most of my parents' teen years were during the 30s. So saving was Job 1. They had some CDs during the time you're talking about. I think maybe 12% yield but I really don't remember.