Interest Rates: 1970’s - today

If you have recently begun your journey of home ownership, you have probably heard about the high interest rates. Even though rates seem to be at an all time high, did you know that in October 1981, interest rates peaked at 18.63%? Interestingly, today’s rates are at the historic average.

1970’s

Freddie Mac (Federal Home Loan Mortgage Corporation) has provided data for 30-year fixed-rate mortgage rates beginning in 1971.

In 1971, rates were 7.59 and by 1974, they had risen to 10.03%. The rates dropped to mid to high 8% before climbing up to 12.9% in 1979.

1980’s

According to Freddie Mac data, in October 1981, interest rates reached 18.63%, which is the all time high in modern history. The 1980’s ended with fixed mortgage rates hovering around 10%.

1990’s

The 1990’s began with a rate of 10.13% but slowly fell throughout the decade and ended with an average interest rate of 6.49%.

2000’s

By 2003, interest rates had fallen to a range in the high 5%. But as a lot of us remember, in 2008, the economy crashed and the real estate industry was brought down also. The Federal government lowered interest rates to an average of 5.04% in 2009 to bring some relief to the country and help the economy get back on its feet.

2010’s

Interest rates started 2010 around 5.09%, but by mid-2012, rates had fallen to around 3.5%. They rose to an average of 3.98% in 2013 and continued to rise to 4.17% on average but then dropped again in 2015 to an average of 3.85%.

After the presidential election in 2016, rates began to rise and topped out at an average of 4.94% at the end of 2018 and beginning of 2019. By the end of 2019, rates had started to decline once again.

2020’s

By January 2020, a fixed rate for a 30 year mortgage was around 3.7%.

In December 2020, the average interest rate was 2.68%, due to the Covid-19 pandemic, and continued through 2021. Interest rates began to rise in March 2022, and have risen to over 8% as of October 2023.

So there you have it. Our 8% rates today may sound terribly high, but if we look at the past 50 years, we must realize that we were fortunate to have some really low rates at different times. Hopefully in the near future, we will again get to experience lower rates. Just remember, if you’re thinking of buying a home soon, lower mortgage interest rates can bring a repeat of 2021 and a highly competitive market with higher home prices.