Historical Mortgage Rates: A Journey Through Time
Explore how mortgage rates have evolved throughout history and find out the current mortgage rate trends and predictors. An overview of home loan interest and the economy.
Historical Mortgage Rates: A Journey Through Time
Mortgage rates have been a popular topic of discussion for many homeowners throughout the years. As people look to invest in a home, they're reminded that mortgage rates are a crucial factor in the process of a large expenditure.
Historical mortgage rates can provide insight into the current rates, in addition to giving a birds-eye view of the ups and downs of these rates over the years. Here's a look at the history of mortgage rates.
1870 to 1930s
The earliest maximum conforming mortgage rates were set in the early 20th century and established at 6%. This rate applied to loans of up to $32,900. Around this same time, interest-only mortgages were available, with interest rates peaking at 93/4%.
From the early 1930s until the early 1950s, mortgage rates averaged between 4% and 6%. This period saw an increase in home ownership due to the post-WWII economy.
Late 1950s to Late 1970s
In 1954, the mortgage rate dropped below 4% for one year, and it didn't drop below 4% again until 1979. This period saw a steady increase in mortgage rates, peaking at 8.86% in 1981.
Early 1980s to Late 1990s
Mortgage rates fell again in the early 1980s and bottomed out in the late 1990s, reaching a historical low of 4.78%. This period helped to spur on an increased buying market.
Early 2000s to Now
Mortgage rates remain low. But in the early 2000s, during the housing crisis, mortgage rates increased to 5.67%. Homeowners were hit hard with rising mortgage payments and it would take years for the market to recover.
Today, mortgage rates are hovering around 3.63%. For the time being, the market remains in a prime position to benefit from the low rates.
Conclusion
The history of mortgage rates provides a peek into the ebbs and flows of market conditions. Although the market's seen its share of lulls and peaks, it's currently in an unprecedented period of low rates that's encouraging potential homeowners to make the investment.