Real Estate A Historical Journey Through 30-Year Fixed Mortgage Rates

By Joseph Callaway

The 30-year fixed mortgage rate, always a subject of speculation, guarantees only one thing: change.

Since Freddie Mac began tracking these rates in 1971, they have experienced significant fluctuations. The peak rate was 18.63% in October 1981, and the lowest point reached 2.65% in January 2021.

The journey begins in the 1970s. Rates started at 7.5% in 1971, escalated to 10.03% in 1974, receded back into the 8% range, and then climbed to 12.9% by 1979.

The 1980s were marked by economic challenges: a recession, an oil embargo, and a savings and loan crisis. Interest rates initially peaked and then gradually decreased to 10.13% by 1988.

By 2003, the 30-year rate had declined to the high 5% range. The following recession pushed it down further to 5.04% in 2009.

As the economy recovered, with stringent borrowing guidelines in place, rates continued to decrease, moving into the 4% range, then into the 3%, and finally hitting a historic low of 2.65% at the onset of the COVID pandemic’s second year. These rates hovered near 3% until May 2022.

However, following the increase in the federal bank rate, mortgage rates also rose. In the last 16 months, they have exceeded 8%, with a recent decrease below this level.

What will 2024 bring? Experts anticipate a decrease of 1 to 1.5%. Only time will reveal the accuracy of these predictions.

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