For over 13 years, borrowing has been relatively easy. Rates haven’t reached more than 2.5%, compared to the highs of nearly 19% in the 80’s. This means if you’re a Millennial or Gen Z, for most of your life, it’s been relatively easy to get a credit card, get a loan for a new car, or even to get a loan.
With the Fed planning on raising rates gradually in the next year, we can expect the rise of rates to drive the increase of rates in mortgages, student loans, auto loans and especially credit cards. But how are you really affected?
Well let's just take mortgages for example: The average rate on a 30-year fixed-rate mortgage was 3.92%, its highest level since May 2019. At this rate, people are going to soon find out their houses are “worth” much less than they think.
Size of mortgage covered by $3,000 monthly payment:
Today on Things Have Changed, we’re going to talk to you about this rising inflation environment and the down stream effects of higher interest rates on your everyday lives.