Unless you plan to buy real estate with an all-cash offer, you’ll likely take out a mortgage. It’s never a bad idea to be aware of mortgage rates, which can be constantly changing due to various factors—inflation, economic growth, Federal Reserve policies, bond market and relevant housing market conditions, among others.
Extra space storagea real estate storage owner and operator in the United States, reviewed the federal loan buyer’s historical mortgage data Freddie Mac to find the average annual rate for a 30-year fixed-rate mortgage, with data going back to 1972.
A fixed rate mortgage is a home loan with a fixed interest rate for the life of the loan. Typically, you’ll see 30- or 15-year fixed mortgages; legacy mortgages are the most common type, with around 90% of home buyers using one in their home purchase.
Mortgage rates were highest in the 1980s when the Fed raised interest rates to fight inflation. Today, economic uncertainty and inflation are driving up mortgage rates. From May 2022, 30-year-olds fixed mortgage rate stands at 5.25% while the average 15-year fixed mortgage rate is 4.43%. So what did they look like 5-10 years ago? Keep reading to see how mortgage rates have changed since the early 1970s.