The History of Interest Rates and the Housing Market

This chapter provides a historical overview of the housing market, discussing the changing relationship between average home prices and median household income. It highlights key events and trends in different decades, such as the introduction of the 30-year fixed rate mortgage, the stagflation of the 1970s, the high inflation and interest rates of the 1980s, the decline in interest rates in the 1990s, the subprime lending crisis and financialization of bad loans in the early 2000s, and the aftermath of the Global Financial Crisis. It also mentions the impact of the pandemic on the economy and supply chains.