Historical Mortgage Rates - Not What Buyers or Borrowers Think With?

It is well-known that mortgage rates have experienced significant fluctuations over time. While today’s rates may seem high compared to a few years ago, they are actually quite typical from a historical perspective.

Some facts to remember:

• *The average 30-year fixed rate reached an all-time low of 2.66% in January 2021. However, it surged to 7.79% in October 2023.

• *Seasoned homeowners recall much higher rates in October 1981 when mortgage rates went as high as 18.63%.

• *Current rates are more than double their all-time low, but when considering the long-term perspective, today’s rates remain close to the historic average.

• *In 1981, the median price for a new single-family home sold in the U.S. for around $68,900 (equivalent to over $200,000 today). As of late 2023, the median new home sales price is $418,800.

• *Adjusting for inflation, the monthly mortgage payment in 1981(with an 18% rate) would be $831, while today’s equivalent (at a 7% rate) would be $2,229.

In summary, while today’s rates may feel high in the context of recent years, they align with historical norms. Mortgages have seen both highs and lows, and understanding this broader perspective helps put the current rates into context.

Sometimes these facts can help when working with a homebuyer or borrower, and sometimes it purely comes down to opinion. But as licensed Agents & Brokers, it’s important to share this information no matter what, to provide a real picture to our clients and hopefully help them make more informed decisions.

Best,

Ken & Ari Walker - Your Direct Private Money Source

Husband & Wife Team

Phone: 707-708-0797 / Office: 1400 N. Dutton Ave #22 Santa Rosa, CA 95401
Ken: CA DRE Broker #01858042 / NMLS #1221130
Ari: CA DRE #01858152 / NMLS #2170867

Bio: Ken & Ari are a husband & wife team with over 30 years of combined real estate and private money lending experience. They like working with buyers & borrowers, as well as directly with other licensed individuals who have clients in need of fast & alternative financing, and who can benefit from Private Money mortgages. (Qualify for our financing despite DTI ratios, credit score, property condition, difficult to prove income, etc. on purchases and refinances for owner occupied & investment properties.)