[windpower]

Not 100% sure about cars, but houses were cheaper. Interest rates being higher means that the monthly payment on a given mortgage amount is higher, meaning the house price that an average buyer can afford goes down. Low interest rates mean that people can afford a more expensive house, and that causes prices to go up.

Anecdotally, my dad complains about paying an interest rate in the teens for the house I grew up in. My parents paid $69K ($188K in 2022 dollars) for the house, which was about a year old. Zillow estimates the same house at $457K today. Obviously not all of the price increase is due to lower interest rates, but the house _was_ much cheaper, so even with a high interest rate, the mortgage was pretty affordable.

[ryandrake]

Also, returns from other investments tied to interest rates were higher. I seem to recall seeing CD rates >10% in the '80s. I know I had a CD paying >6% as late as the mid '90s. This world where basic banking investments are pointless and pay ~0% is a historic anomaly.

[trgn]

tbh maybe it should stay like that, it's only an anomaly if you start your timeline at the advent of central banking. Interest rates on deposits are a purely mathematical fiction, creating no new value. If people would like to see their old tired moneys sprout new baby moneys out of thin air, they should convert their savings into capital, and effectively invest in productive enterprise. Any capital gain then is by market consensus that new value has been created by your investment in that enterprise.

[alphabettsy]

I think the idea was that deposits support other investments but where would that idea have come from? Sounds silly.