How mortgage rates have changed since 1972 | Personal finance
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 a variety of factors, including inflation, economic growth, Federal Reserve policies, the bond market, and real estate market conditions.
Extra Space Storage, a real estate storage owner and operator in the United States, looked at historical mortgage data from federal loan buyer Freddie Mac to find the average annual rate for a 30-year fixed-rate home loan, with data dating 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. In May 2022, the 30-year fixed mortgage rate was 5.25%, while the average 15-year fixed mortgage rate was 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.