If you have tried convincing a 25 or 30-year-old to buy a home lately, you have probably heard this response:
“Yeah, but houses didn’t cost $500,000 back then.”
They are not wrong.
For years, the go-to argument from older generations and even industry professionals has been, “When I bought my first house, rates were 18%.” The goal is to put today’s rates into perspective.
But in today’s market, that argument does not land. In Indiana, using the wrong framing can cost a younger buyer years of wealth building.
Why the 18% Rate Story Falls Flat
From a younger buyer’s perspective, the comparison feels disconnected from reality:
- 18% on a $60,000 house
- 8% on a $500,000 house
Yes, the percentage was higher decades ago. But the dollar impact today feels heavier. Monthly payments relative to income feel different. Student loans, rent, and everyday costs add a layer of pressure that didn’t exist then.
Tevis Durbin has been originating mortgages in Indiana since at least 2000 and leads the Durbin Team at Supreme Lending. After helping thousands of buyers across multiple rate environments, he’s seen firsthand how messaging either builds clarity or shuts a conversation down.
“I’ve talked about it a lot over the last few weeks with the younger generation buying houses. The approach that we’re doing with them as an industry is wrong because if I come across and try to tell them, ‘When I bought my first house interest rates were 18%,’ they don’t care. That doesn’t resonate with them. And in fairness, if they do respond, they’re 18% on a $60,000 house is far more manageable than 8% on a $500,000 house. And there’s a lot of validity to that. I think it’s not a very good argument to make.”
Making the argument about past rates does not answer the real question younger buyers are asking: “Why should I do this now?”
The Asset Framework That Actually Connects
Instead of focusing on rates from decades ago, the smarter conversation centers on housing as an asset and the time value of money. Not hype. Not pressure. Just math.
Here is the reframed approach.
Appreciation Over Time
When you buy today and sell years later, the property is typically worth more than your initial purchase price. Indiana historically experiences steady, moderate appreciation instead of extreme swings. Over time, that growth compounds. Even modest annual appreciation can build meaningful equity over a five- to seven-year period.
Amortization and Principal Paydown
Every payment reduces the amount you owe. While it moves slowly at first, principal reduction accelerates over time. That reduction becomes equity you own. You are not just paying to live somewhere. You are paying down an asset.
Tax Considerations
Depending on your situation, mortgage interest and property taxes may provide tax advantages. Every buyer should confirm the details with a qualified tax professional, but for many households, ownership can helpfully change their tax picture.
Time in the Market Beats Timing the Market
Younger buyers often ask, “Should I wait for rates to drop?”
The more productive question is, “How long do I want the clock working for me?”
The longer you own, the more appreciation and principal paydown stack together. Waiting delays the compounding effect.
This asset framework speaks directly to a generation already comfortable with ETFs, retirement accounts, and long-term investing. It shifts the conversation from comparison to strategy.
The Tree Principle and the Time Value of Money
Younger buyers are not resistant to ownership. Many have strong savings and stable careers. What they often lack is urgency.
Time is the silent variable.
The entire premise rests on the time value of money. It echoes an old piece of wisdom: the best time to plant a tree was decades ago, but the second-best time is today.
When buyers choose to wait, they actively miss out on the financial benefits of ownership. Every year on the sidelines is a year without capturing property appreciation. It is a year without amortization, reducing the principal balance. It is a year without potential tax advantages.
That is the real message. Not fear. Not scarcity. Just time.
If a buyer waits five years, they miss five years of potential appreciation, five years of principal reduction, and five years of leverage working on their behalf.
How Waiting Can Cost More
A 29-year-old buyer in Fishers recently faced this exact dilemma. She had solid savings and a stable job in healthcare. She kept waiting for rates to drop back into the threes. Each year, home prices in her Hamilton County target neighborhood crept up.
We modeled two paths:
- Path one: Buy now at current rates, plan to refinance if rates improve, and hold for at least five years.
- Path two: Wait two to three years for lower rates, keep renting, and hope prices do not rise further.
We ran conservative appreciation estimates and factored in principal paydown. The five-year ownership path showed a significantly higher net position than waiting. Even if rates declined later, she could refinance. She could not retroactively capture the appreciation she missed.
The Hidden Twist Many People Miss
Many younger buyers currently have:
- Fewer fixed expenses
- No children yet
- More lifestyle flexibility
- Strong cash reserves
In some cases, they are financially stronger now than they will be later when daycare, larger vehicles, and other life costs stack up.
Waiting until life gets more expensive can make qualifying harder, not easier. Income may rise, but so do obligations.
What This Means for Indiana Buyers
Indiana is not a boom-and-bust coastal market. It has historically offered steady growth and relative affordability compared to Chicago and other Midwest metros.
The real question is not, “Will rates go back to 3%?”
The better question is, “How long do I want to wait before the clock starts working in my favor?”
If you are a younger buyer or a parent trying to guide one, shift the conversation away from the 1980s.
Model:
- What ownership looks like over five to seven years
- How much equity could realistically be built?
- What happens financially if you wait
Clarity reduces stress. A real plan removes surprises.
Common Questions Younger Buyers Ask
Is it irresponsible to buy when rates are not at historic lows?
No. A responsible purchase depends on payment comfort, reserves, and time horizon. Rates change. A long-term plan matters more.
What if rates drop after I buy?
You can explore refinancing if it makes financial sense. You cannot reclaim years of missed appreciation.
What if home values stall?
Short-term fluctuations happen. A five to seven-year window reduces the impact of small dips and allows time for recovery in most steady markets like Indiana.
Should I wait until I am married or have kids?
That depends on your goals. From a financial perspective, buying before expenses rise can strengthen your position.
Is renting always throwing money away?
Rent provides flexibility. But it does not build equity. Ownership converts a portion of your payment into long-term value.
How do I know if I am truly ready?
Look at stable income, manageable debt, cash reserves, and a realistic plan to stay put for several years. Then run the numbers.
Let’s Make a Plan
The 18% rate story does not move today’s buyers forward. A clear asset strategy does.
If you want to see what ownership could look like over the next five to seven years, let’s run your numbers and build a plan that fits your life. Talk with the Durbin Team today.