Get All Access for $5/mo

In the '80s, Mortgage Rates Were Almost Three Times As High — But It's Still Harder To Buy a Home Now While the Fed has hiked up mortgage rates as a means to tame inflation, but it's nothing compared to 40 years ago.

By Madeline Garfinkle

Opinions expressed by Entrepreneur contributors are their own.

The 30-year fixed-rate mortgage hit 6.70% this week, sending some prospective homebuyers into a frenzy, and others backing out of contracts in droves.

While the recent hikes are jarring, it's actually nothing compared to rates back in the 1980s.

In September 1981, a 30-year fixed-rate mortgage was at a double-digit high of 19%. Connie Strait, who started her career in real estate in the '80s, told CNN she remembers how "delighted" she was when closing her new home at a rate of 19%, fearing rates would rise to 20% the following week.

"Unfortunately, now people don't remember how Baby Boomers were getting rates of 10%, 12% and higher for most of the 1980s," Strait told CNN. "Meanwhile, our kids are shocked by 6%."

Related: Mortgage Rates Are Above 6 Percent For The First Time Since 2008

However, given factors like inflation and skyrocketing home prices, buying a home is still more expensive for many prospective buyers today than it was 40 years ago, despite mortgage rates being significantly lower.

In October 1981, the average home cost $70,398. Today, it's $434,978.

To make matters worse, rising home prices have significantly outpaced changes in income. In the past five years, average home prices have risen by 60%, while income has only increased by 15%, according to CNN.

So while mortgage rates are looking slim compared to the 1981 highs, the current economic conditions have made homebuying farther out of reach than four decades ago.

Related: The Real-Estate Game Is Changing Fast. Are You Ready to Win?

Madeline Garfinkle

News Writer

Madeline Garfinkle is a News Writer at Entrepreneur.com. She is a graduate from Syracuse University, and received an MFA from Columbia University. 

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Side Hustle

This 26-Year-Old's Side Hustle That 'Anybody Can Do' Grew to Earn $170,000 a Month. Here's What Happened When I Tested It.

Stephen Alvarez was working at a dental supply company and following his passion for cars on the side — then an Instagram ad changed everything.

Business News

Mark Zuckerberg Says an Upcoming Meta Product Left Testers 'Giddy'

Meta is almost ready to show this gadget to the public.

Business News

Over 10 Billion Passwords Have Been Exposed in the Largest Password Hack in History

The data is thought to have been collected over the past two decades.

Business News

Serena Williams Once Tried to Deposit a $1 Million Check at an ATM Drive-Thru: 'I Never Played for Money'

The tennis legend recently appeared on an episode of "Hot Ones" with Sean Evans.

Business News

Wells Fargo Analysts Tested 75 Bowls at Chipotle — and the Portion Sizes Were Wildly Inconsistent

Zachary Fadem and a team of analysts ordered the same bowl 75 times at eight different NYC restaurants.