Dear Friends
As a mortgage lender, one comparison I like to make heading into a new year is to look back at where our rates had been throughout the year, and compare to where they are presently. I typically make my own personal forecast on where I think rates are headed for the coming year. Below is a revealing graph and chart depicting how mortgage rates have changed over the past 45+ years.
Mortgage Rate History: 1971 to Today
Home buyers who have recently borrowed a fixed-rate mortgage have benefited from interest rates at historical lows. After reaching a high of nearly 19% in 1981, mortgage rates have had a steady decline and remained in the low single digits. Since the housing crisis in 2008, rates have consistently remained under 6%, with a rate on a 30-year fixed-rate mortgage bottoming out at 3.31% in November 2012.
Historical Mortgage Rates: Averages and Trends from the 1970’s to 2017
Over the past 45 years, interest rates on a 30-year fixed-rate mortgage have ranged from as high as 18.63% in 1981 to as low as 3.31% in 2012. Rates today remain at historical lows, with over 60% of mortgage holders paying rates between 3.00% and 4.90% as of 2015. We used interest rate data from Freddie Mac’s Primary Mortgage Market Survey (PMMS) to examine historical mortgage rates and the factors that have impacted their downward trend.
Year |
Lowest Rate |
Highest Rate |
Average Rate |
|---|---|---|---|
| 2017 | 3.89% | 4.30% | 4.10% |
| 2016 | 3.41% | 4.32% | 3.65% |
| 2015 | 3.59% | 4.09% | 3.85% |
| 2014 | 3.80% | 4.53% | 4.17% |
| 2013 | 3.34% | 4.58% | 3.98% |
| 2012 | 3.31% | 4.08% | 3.66% |
| 2011 | 3.91% | 5.05% | 4.45% |
| 2010 | 4.17% | 5.21% | 4.69% |
| 2009 | 4.71% | 5.59% | 5.04% |
| 2008 | 5.10% | 6.63% | 6.03% |
| 2007 | 5.96% | 6.74% | 6.34% |
| 2006 | 6.10% | 6.80% | 6.41% |
| 2005 | 5.53% | 6.37% | 5.87% |
| 2004 | 5.38% | 6.34% | 5.84% |
| 2003 | 5.21% | 6.44% | 5.83% |
| 2002 | 5.93% | 7.18% | 6.54% |
| 2001 | 6.45% | 7.24% | 6.97% |
| 2000 | 7.13% | 8.64% | 8.05% |
| 1999 | 6.74% | 8.15% | 7.44% |
| 1998 | 6.49% | 7.22% | 6.94% |
| 1997 | 6.99% | 8.18% | 7.60% |
| 1996 | 6.94% | 8.42% | 7.81% |
| 1995 | 7.11% | 9.22% | 7.93% |
| 1994 | 6.97% | 9.25% | 8.38% |
| 1993 | 6.74% | 8.07% | 7.31% |
| 1992 | 7.84% | 9.03% | 8.39% |
| 1991 | 8.35% | 9.75% | 9.25% |
| 1990 | 9.56% | 10.67% | 10.13% |
| 1989 | 9.68% | 11.22% | 10.32% |
| 1988 | 9.84% | 10.77% | 10.34% |
| 1987 | 9.03% | 11.58% | 10.21% |
| 1986 | 9.29% | 10.99% | 10.19% |
| 1985 | 11.09% | 13.29% | 12.43% |
| 1984 | 13.14% | 14.68% | 13.88% |
| 1983 | 12.55% | 13.89% | 13.24% |
| 1982 | 13.57% | 17.66% | 16.04% |
| 1981 | 14.80% | 18.63% | 16.64% |
| 1980 | 12.18% | 16.35% | 13.74% |
| 1979 | 10.38% | 12.90% | 11.20% |
| 1978 | 8.98% | 10.38% | 9.64% |
| 1977 | 8.65% | 9.00% | 8.85% |
| 1976 | 8.70% | 9.10% | 8.87% |
| 1975 | 8.80% | 9.60% | 9.05% |
| 1974 | 8.40% | 10.03% | 9.19% |
| 1973 | 7.43% | 8.85% | 8.04% |
| 1972 | 7.23% | 7.46% | 7.38% |
| 1971 | 7.29% | 7.73% | 7.54% |
| Overall | 3.31% | 18.63% | 8.21% |
Note that 2017 rates reflect Fannie Mae PMMS data through June 8, 2017.
(source: ValuePenguin.com – http://bit.ly/2BIoSor)
For the history of many key interest rates:
For Further Reading on the where interest rates may be headed for 2018, see articles below:
-
December 20, 2017 article by Patti Domm, CNBC Executive News Editor, responsible for news coverage of the markets and economy: “Quick
move in higher interest rates could be warning for 2018” -
December 19th, 2107 by Bloomberg author/reporter Liz McCormick: “U.S. Treasury Sales Are About to Double in 2018. Who’s Buying?”
-
November 16th, 2017 Kiplinger article by Staff Economist, David Payne: “Economic Forecasts – Rates Due for Moderate Increase, Kiplinger’s latest forecast on interest rates.”
Also, if you know of someone who is looking to get into the housing market this coming year, please pass my name and contact information along. We will be working and on call through this Holiday Season. We greatly appreciate your referrals as our source of business! Thank you for everything, Happy Holidays to you and yours.
~Mortage Lender, Naomi Schroeder
877-906-4480
