Important points
Looking at the past 40 years, the average interest rate on a 30-year fixed mortgage peaked in 1981 at just over 16 percent.
The average 30-year fixed rate bottomed out at just under 3% in 2021.
For most of 2024, the cost of a typical 30-year fixed mortgage was in the low 6% range to 7% range. As of early November, the average interest rate on a 30-year fixed-rate mortgage was 7%.
housing mortgage As we know it today, it is less than a century old. In fact, until the creation of the Federal Housing Administration (FHA) in 1934, only one in ten Americans owned a home. It’s all 30 year fixed rate mortgage Homeownership became possible for millions of people during the Great Depression.
Trends in mortgage interest rates
Trends in mortgage interest rates in the 2020s
So far, the 2020s have brought dramatic changes in mortgage rates. Entering 2020, 30-year fixed-rate mortgages were already below 4%. Then the COVID-19 pandemic began, and interest rates hit record lows.
By 2022, the Federal Reserve began raising benchmark interest rates to curb pandemic-fueled inflation, and mortgage rates followed suit. Fast forward to October 2023, and 30-year mortgage rates topped 8%. This average hasn’t been seen since 2000.
For most of 2024, mortgage interest rates will remain in the 6s and 7s range. The Fed cut rates again in September and again in November. For now, the consensus is that central banks will continue on that path in 2025.
highest average rate | 7.00% (2023) |
lowest average rate | 3.15% (2021) |
Trends in mortgage interest rates in the 2010s
In the 2010s, 30-year mortgage interest rates trended downward, starting in the 4% range, falling below the 4% range, and then returning to that range to end the decade. These low interest rates were brought about in part by the Federal Reserve’s Great Recession-era policies.
highest average rate | 4.86% (2010) |
lowest average rate | 4.13% (2019) |
Trends in mortgage interest rates in the 2000s
In the wake of the subprime mortgage crisis of the late 2000s, 30-year mortgage rates fell from about 8% at the beginning of the decade to 5.4% by 2009. At this time, the Federal Reserve System quantitative easing The policy is to purchase large quantities of mortgage bonds to lower interest rates and stimulate economic recovery.
highest average rate | 8.08% (2000) |
lowest average rate | 5.38% (2009) |
Trends in mortgage interest rates in the 1990s
The 1990s saw significant changes in 30-year mortgage rates, dropping to an average of 6.91% in 1998. This decline was driven by the dot-com bubble, a time when investors rushed to buy shares in overvalued technology companies. As these stocks plummeted, investors turned to fixed-income investments such as bonds. As bond prices rose and yields fell, mortgage rates, which track the 10-year Treasury yield, also fell.
highest average rate | 9.97% (1990) |
lowest average rate | 6.91% (1998) |
Trends in mortgage interest rates in the 1980s
In the early 1980s, the median home price in the United States was $63,700. Department of Housing and Urban Development (HUD). By 1990, that median had risen to $123,900. Fueled by great inflation, 30-year fixed mortgage rates reached a peak of 18.4% in October 1981, according to Freddie Mac. Once the Fed reined in inflation, the 30-year interest rate fell to the 9% range, ending the decade at 9.78%.
Highest average rate* | 16.64% (1981) |
lowest average rate | 10.25% (1989) |
Trends in mortgage interest rates in the 1970s
The average for a 30-year fixed-rate mortgage began the decade at about 7.5% in 1971, the earliest year for which data is available, according to Freddie Mac. By 1979, this rate had risen to an average of 11.2 percent. Over the past decade, the Federal Reserve’s expansionary policies and other factors have significantly increased inflation and borrowing costs.
Highest average rate* | 11.20% (1979) |
Lowest average rate* | 7.54% (1971) |
Mortgage interest rate prediction
Although we can make assumptions based on historical data, no one knows what future mortgage rates will do over time, whether or when they will change at all. The economy and housing market are cyclical and experience ups and downs that are sometimes unpredictable.
Still, we regularly consult economists and other experts. Check out our report for weekly forecasts. Mortgage interest rate survey. For monthly outlooks, read our latest updates Mortgage interest rate prediction.
Impact of past mortgage interest rates on home purchases
Broadly speaking, lower mortgage rates can stimulate demand among homebuyers and increase individual purchasing power. On the other hand, higher interest rates mean higher monthly mortgage payments, which can be a barrier for buyers if they can’t afford the cost. Typically, these are borrowers with good credit scores, steady income, and a large down payment. Subject to minimum price.
You should pay attention to mortgage rates, but don’t try to time the market or predict what will happen. A home is both an investment and a place for you to live. Generally, it’s best to only take out a mortgage when you can afford it and when the time is right.
learn more: How are mortgage interest rates determined?
Impact of past mortgage interest rates on refinancing
If mortgage rates are trending upward, it may not make much economic sense to try to increase your mortgage rate. Refinancing. Generally, it’s best to refinance if you can save 0.5 to three-quarters of a percentage point off your current interest rate and if you plan to remain in your home for a longer period of time. If you are planning to sell your home soon, Refinancing costs It may not be worth it.
