Thirty years ago today, October 19, 1987, the stock market fell 23%, the largest single day loss in history. The equivalent today would be a 5,300 point drop in the Dow Jones Industrial Average.
So where do we stand now in comparison to 10/19/1987?
- The DJIA has risen from 1,783 to over 23,000, a thirteen-fold increase.
- Portland housing prices are now 433% above their October, 1987 levels.
- Median income for a family of four has gone from $32,900/year to $74,700/year, a 127% increase
- Thirty year mortgage rates have gone from 11.26% then to 4.16% today, 37% of what they once were.
In terms of housing affordability, a family of four earning the median income in 1987 could not afford a median priced home in Portland.
Now, that same family earns 6% more than needed to afford a median priced home.
Home prices have risen far more than incomes, yet interest rates continue to make homes more affordable now than in 1987.
Just something to think about.