Back in the early 1980s, Fed Chair Paul Volcker made the gutsy decision to do whatever it took to tame the inflationary run that had started in the ’70s—even if it came at a great economic cost.
Volcker ultimately achieved his goal but only after spiking mortgage rates—which climbed to 18% in 1981—created a housing market downturn so sharp that it drove the economy into a recession. However, while home sales and building levels both cratered in 1981, national home prices actually remained fairly stable throughout the downturn.
