History of Past Interest Rates
History Of Past Interest Rates
What is influencing our home interest rates right now? Is this a good time to buy a new home? There are mixed reactions to all of this.
The past might help you understand the present.
The mortgage rates have never been in the control of the lenders or the banks. There is a ‘secondary market"‘ that buys and sells mortgages at bundled rates. History shows us that mortgage rates have a long standing relationship with the “Treasury Yield”. The Treasury Yield is the interest rate the government gets to borrow money.
I am sure you have noticed the sudden increase in the current mortgages rates from 2.75 up to 6% and higher these days. I remember 1971 rates as a newly wed when mortgage rates were in the mid 7’s. Yet ten years later, it rose over the years at a steep increase bringing it to the mid 16’s for a home loan. Looking at ten years later in 1991, rates dropped to just over 9 percent.
Today our economy is slowing and inflation has crept into our lives. Does that affect the mortgage rates? It does. Our rates fell dramatically at the beginning of 2019. Rates we have not seen in years. With the rise of inflation, and a falling stock market, mortgage rates are likely to be affected and continue to go higher. History has show us home interest rates usually go the opposite of the movement of the stock market.
Should you buy a home right now? Some will tell you if you find the perfect home, it is better to buy it and refinance when rates drop again. It could be rates will continue to rise and you might consider that if you are truly needing to move. If you do not buy the ‘perfect’ home that fits your needs when it is available, you may be disappointed when rates drop and you start your home search again.
Current rates in Nov of 2022 and early Dec of 2022 are more ‘average’ with our history of home loan rates. If you look at the chart below, from about 1980 to 1990, interest rates were 10 percent up to 16 percent over a ten year period. Then with these years of high interest rate, it did not affect the market at that time.
This is just a short blog on home interest rates to show you how they have historically gone up and down. Follow your instinct if you are house hunting and you find that perfect house… you need to consider our current rates are really not as high as you might believe.
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