In 2020 the average mortgage rate was 3.11%, and it kept falling to a new record low of just 2.65% in January of 2021. These ultra-low rates were due to government response to COVID-19. Houses were flying off the shelf during the early COVID-19 pandemic. These low rates were created by the Federal Reserve policies at that time.
HISTORIC MORTGAGE RATES: IMPORTANT YEARS FOR RATES
The long-term average for mortgage rates is just under 8 percent. This includes records going back to 1971. But mortgage rates can move a lot from year to year, and some years have seen much bigger moves than others.
1981: THE ALL-TIME HIGH FOR MORTGAGE RATES
1981 was the worst year for mortgage interest rates on record.
How bad is bad? The average mortgage rate in 1981 was 16.63 percent.
And that’s just the average – some people paid more. For the week of Oct. 9, 1981, mortgage rates averaged 18.63%, the highest weekly rate on record – and nearly five times the 2019 annual rate.
2008: THE MORTGAGE SLUMP
2008 was the final gasp of the mortgage meltdown. Real estate financing was available in 2008 for 6.03% according to Freddie Mac.
After 2008, rates declined steadily.
2016: AN ALL-TIME LOW FOR RATES
Until the Covid-19 Pandemic, 2016 held the lowest annual mortgage rate on record going back to 1971. The typical 2016 mortgage was priced at just 3.65 percent.
2019: THE SURPRISE MORTGAGE RATE DROP-OFF
In 2018, many economists predicted that 2019 mortgage rates would top 5.5 percent. That turned out to be wrong. In fact, rates dropped in 2019. The average mortgage rate went from 4.54% in 2018 to 3.94% in 2019.
In 2019, it was thought mortgage rates couldn’t possibly go lower. But 2020 and 2021 proved the economic forecasters wrong again.
2021: THE LOWEST 30-YEAR MORTGAGE RATES – EVER
Rates plummeted in 2020 and 2021 in response to the COVID-19 pandemic. By July 2020, the 30-year fixed rate fell below 3% for the first time. And it kept falling to a new record low of just 2.65% in January 2021.
However, record-low rates were largely dependent on Covid-era policies from the Federal Reserve. Those measures were never meant to last. And the more U.S. and world economies recover from their Covid slump, the higher interest rates are likely to go.
2022: MORTGAGE RATES SPIKE
Thanks to sharp inflation growth, higher benchmark rates, and a reduction of the Federal Reserve purchases of mortgage loans, mortgage rates doubled in 2022 and continue higher through 2023.
If you are considering a refinance or home purchase, we are happy to share our recommendation for the best lender providing home loans with the lowest interest rates. Our clients have been securing fixed-rate hybrid loans in the 5.75% range. I personally choose these loans for my property purchases. Feel free to call, and I can share why.
April is typically the best month to sell a home in Southern California. Today, there are only 13 homes on the market in Cypress. This includes all houses, townhomes, and condos. The average for homes for sale in April is 50. Available inventory is very low. If you are considering a move in 2023, you currently have very little competition, and will likely receive a higher price for your home. We can share the latest information on the current real estate market, and review the best options for you. Just give us a call.
Working with an experienced real estate agent is critical in this market. We have personally sold over 1,000 homes in Cypress, and know every neighborhood well. That’s experience you can trust. We can provide the latest information to insure you receive the highest price for your home. Call us direct at1-800-944-2441 or email: Cary@Cary4Homes.com. And of course, all of our conversations are confidential. Let’s talk soon!
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