{"id":32833,"date":"2024-08-28T06:00:58","date_gmt":"2024-08-28T13:00:58","guid":{"rendered":"https:\/\/www.homelight.com\/blog\/?p=32833"},"modified":"2026-04-07T00:07:51","modified_gmt":"2026-04-07T07:07:51","slug":"buyer-mortgage-rates-history","status":"publish","type":"post","link":"https:\/\/www.homelight.com\/blog\/buyer-mortgage-rates-history\/","title":{"rendered":"How Do Today\u2019s Mortgage Rates Compare with History?"},"content":{"rendered":"

Until recently, it\u2019s likely you\u2019ve seen news headlines declaring, \u201cMortgage interest rates hit a 23-year high<\/a>.\u201d Fortunately, rates have finally started to drop from their October peak of nearly 8%, but how do today\u2019s rates compare with what our parents and grandparents paid? What can be found in the bigger picture of mortgage rates history in the United States?<\/p>\n

A moment of reflection can be helpful if you\u2019re trying to decide if now is a good time to buy. Or perhaps you have a mortgage that you refinanced<\/a> during the pandemic-era low rates, and you\u2019ve been waiting for the right time to make a move.<\/p>\n

Jerome Leyba<\/a> is a top-rated real estate agent in New Mexico who sells homes 32% faster than average agents in his Santa Fe region. He explains that there\u2019s a natural ebb and flow to the market, \u201cInterest rates go up, the market slows, they go down a little bit, and the market speeds back up.\u201d<\/p>\n

Let\u2019s take a brief look at the economic factors that make rates go up or down. You may find things aren\u2019t as bad as the headlines might lead you to think.<\/p>\n

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How Much Is Your Home Worth Now?<\/h3>\n

Home values have rapidly increased in recent years. How much is your current home worth now? Get a ballpark estimate from HomeLight’s free Home Value Estimator.<\/p>\n \n

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What causes mortgage rate fluctuations?<\/h2>\n

The Federal Reserve, inflation, and recessions have caused mortgage rate fluctuations throughout history \u2014 but how? Think of each of these factors as pieces of a puzzle that, when combined, give some context to the average mortgage rate of a particular time period.<\/p>\n

Federal reserve<\/h3>\n

The Federal Reserve controls the country\u2019s monetary policy<\/a>. The primary goals of this government entity are to maintain stable prices and employment, and to set long-term interest rates. The Fed determines the rate at which banks will lend money to each other by setting what is called the federal funds rate<\/a>. Maintaining stable prices means combating excessive inflation \u2014 the Fed will raise the federal funds rate to reduce the rate of inflation, and these higher rates are then passed onto consumers.<\/p>\n

Inflation<\/h3>\n

Inflation occurs when prices rise, and your dollar doesn\u2019t go as far \u2014 i.e. the grocery cart that cost $100 two weeks ago now costs $120, but you still only have $100 to budget for groceries. In response to growing inflation, interest rates rise across the economy to discourage unnecessary consumer spending. Demand for mortgage-backed securities drops, further causing rates to rise.<\/p>\n

Bond market<\/h3>\n

Investors looking for low-risk but a return on their investments often find what they\u2019re looking for in the bond market<\/a>. Bonds are debt securities issued by either the government or corporations and sold to investors.<\/p>\n

Banks, and government-sponsored enterprises Freddie Mac and Fannie Mae, often \u201cbundle\u201d mortgages together in mortgage-backed securities<\/a> or \u201cMBS.\u201d They then sell these securities to the same investors that invest in the bond market, but they have to pay investors higher rates. There\u2019s more risk to an MBS \u2014 if consumers default on the underlying loans and foreclosures rise, the security\u2019s value declines. A higher rate of return incentivizes investors to assume that risk.<\/p>\n

Recessions<\/h3>\n

The National Bureau of Economic Research states that a recession is defined by<\/a>, \u201ca significant decline in economic activity that is spread across the economy and lasts more than a few months.\u201d Related to this, unemployment often rises during a recession, which decreases demand for mortgages. If you\u2019re in a position to buy a home, that could be a good thing. Interest rates fall due to less demand. And, sadly, sellers facing foreclosure due to unemployment are often more motivated to sell.<\/p>\n

The economy<\/h3>\n

All of the above factors contribute to what people generally call \u201cthe economy.\u201d If the country is in a recession, if the unemployment rate is rising, and inflation is up, pundits will say that the economy isn\u2019t doing well. Whether or not the economy is \u201cdoing well\u201d directly impacts mortgage rates, as we can see when looking at past decades.<\/p>\n

<\/div>\n

Mortgage rates history<\/h2>\n

Was it cheaper for your parents or grandparents to buy a house? Looking back through the decades, mortgage rates have fluctuated over time. The difference in mortgage rates between buying a home in the 1970s versus buying in the 1950s could literally be thousands \u2014 if not hundreds of thousands \u2014 of dollars over the life of the mortgage loan.<\/p>\n

Here\u2019s what you might have paid for a mortgage in past decades (and why) with data from Freddie Mac<\/a>.<\/p>\n

Mortgage interest rates 1974-2024<\/h3>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Year<\/strong><\/td>\nAverage 30-year rate<\/strong><\/td>\nYear<\/strong><\/td>\nAverage 30-year rate<\/strong><\/td>\nYear<\/strong><\/td>\nAverage 30-year rate<\/strong><\/td>\nYear<\/strong><\/td>\nAverage 30-year rate<\/strong><\/td>\n<\/tr>\n
1974<\/strong><\/td>\n9.19%<\/td>\n1987<\/strong><\/td>\n10.21%<\/td>\n2000<\/strong><\/td>\n8.05%<\/td>\n2013<\/strong><\/td>\n3.98%<\/td>\n<\/tr>\n
1975<\/strong><\/td>\n9.05%<\/td>\n1988<\/strong><\/td>\n10.34%<\/td>\n2001<\/strong><\/td>\n6.97%<\/td>\n2014<\/strong><\/td>\n4.17%<\/td>\n<\/tr>\n
1976<\/strong><\/td>\n8.87%<\/td>\n1989<\/strong><\/td>\n10.32%<\/td>\n2002<\/strong><\/td>\n6.54%<\/td>\n2015<\/strong><\/td>\n3.85%<\/td>\n<\/tr>\n
1977<\/strong><\/td>\n8.85%<\/td>\n1990<\/strong><\/td>\n10.13%<\/td>\n2003<\/strong><\/td>\n5.83%<\/td>\n2016<\/strong><\/td>\n3.65%<\/td>\n<\/tr>\n
1978<\/strong><\/td>\n9.64%<\/td>\n1991<\/strong><\/td>\n9.25%<\/td>\n2004<\/strong><\/td>\n5.84%<\/td>\n2017<\/strong><\/td>\n3.99%<\/td>\n<\/tr>\n
1979<\/strong><\/td>\n11.20%<\/td>\n1992<\/strong><\/td>\n8.39%<\/td>\n2005<\/strong><\/td>\n5.87%<\/td>\n2018<\/strong><\/td>\n4.54%<\/td>\n<\/tr>\n
1980<\/strong><\/td>\n13.74%<\/td>\n1993<\/strong><\/td>\n7.31%<\/td>\n2006<\/strong><\/td>\n6.41%<\/td>\n2019<\/strong><\/td>\n3.94%<\/td>\n<\/tr>\n
1981<\/strong><\/td>\n16.63%<\/td>\n1994<\/strong><\/td>\n8.38%<\/td>\n2007<\/strong><\/td>\n6.34%<\/td>\n2020<\/strong><\/td>\n3.10%<\/td>\n<\/tr>\n
1982<\/strong><\/td>\n16.04%<\/td>\n1995<\/strong><\/td>\n7.93%<\/td>\n2008<\/strong><\/td>\n6.03%<\/td>\n2021<\/strong><\/td>\n2.96%<\/td>\n<\/tr>\n
1983<\/strong><\/td>\n13.24%<\/td>\n1996<\/strong><\/td>\n7.81%<\/td>\n2009<\/strong><\/td>\n5.04%<\/td>\n2022<\/strong><\/td>\n5.34%<\/td>\n<\/tr>\n
1984<\/strong><\/td>\n13.88%<\/td>\n1997<\/strong><\/td>\n7.60%<\/td>\n2010<\/strong><\/td>\n4.69%<\/td>\n2023<\/strong><\/td>\n6.81%<\/td>\n<\/tr>\n
1985<\/strong><\/td>\n12.43%<\/td>\n1998<\/strong><\/td>\n6.94%<\/td>\n2011<\/strong><\/td>\n4.45%<\/td>\n2024<\/strong><\/td>\n6.1%- 6.8%*<\/td>\n<\/tr>\n
1986<\/strong><\/td>\n10.19%<\/td>\n1999<\/strong><\/td>\n7.44%<\/td>\n2012<\/strong><\/td>\n3.66%<\/td>\n2025<\/strong><\/td>\nTBD<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Source: Freddie Mac<\/a> (*2024 estimated average range as of August 27)<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

How do today\u2019s mortgage rates compare to historical rates? How might U.S. mortgage rates history and trends impact your home purchase today?<\/p>\n","protected":false},"author":298,"featured_media":47592,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"cybocfi_hide_featured_image":"","footnotes":""},"categories":[192,620,697],"tags":[748],"class_list":["post-32833","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-for-buyers","category-buy-house","category-market-news","tag-mortgage-rates"],"acf":[],"yoast_head":"\nHow Do Today\u2019s Mortgage Rates Compare with History?<\/title>\n<meta name=\"description\" content=\"How do today\u2019s mortgage rates compare to historical rates? 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