The History of Mortgage Rates (1981 – 2016)

You may be inundated with lenders tooting their horns about the near record low mortgage rates we experienced all of 2016. You hear it so often that you’ve tuned out. Well, it’s hard to appreciate where we are today if we don’t look at the past.

So let’s take a quick look:

Mortgage_Rate_History

  • In July 2016 – rates hit the lowest since 2012 = 3.44% with a cost of ½% and in August went even lower to 3.36%.
  • Today – average rates are about 4.02%
  • In December 2012 – The lowest since FNMA has kept records, rates were 3.35%
  • 10 Years Ago, in 2006 – we had a 6.41% annual average rate
  • At the turn of the Century, 2000 – 8.05% was the annual average
  • 20 Years Ago, in 1996 – it was 7.81%
  • 30 Years Ago, 1986 – it was 10.19%
  • The All-Time High was in October 1981 – at 18.45% with 2.3 points. That was the month that President Reagan was shot, Pope John Paul was shot, and the stock market reacted.

So, to put this in perspective, if you bought a house in October 1981 at $200,000 with 20% Down, your payment would be $2,471.17 plus taxes & insurance. If you bought a $500,000 house with today’s rates, your payment would be about $1,824.21 plus taxes and insurance. The mortgage interest rates play a huge role in affordability, balancing out today’s home values. My point is that looking back into history may be the dose we need to really appreciate where we are today and help you understand why lenders keep shouting from the rooftops.

As we go into the next year, the bond market is uncertain, so rates may continue to climb modestly, per many of the industry analysts. Regardless, rates historically are still very affordable and now is a time to lock it in. Whether you are buying your first home, moving up into that forever home, downsizing into a luxury home, or refinancing your existing home, don’t procrastinate or hedge the market.

FHA Home Loan and VA Home Loan

For many first-time homebuyers, there are low down payment options such as the FHA Home Loan and VA Home Loan. There are also down payment assistant programs like the Sapphire Grant Program, CalHFA Plus with Zip, and several others. There are even programs that help pay for part or all your closing costs like the one for teachers called the CalHFA Extra Credit Teachers Program.

If you’d like more information on any of these programs, for today’s mortgage rate, or to get preapproved, give us a call today to get started. We get it. We love to help you meet your homeownership goals.