Today’s interest rates compared to the 1980’s

The highest mortgage interest rates in the United States occurred in the early 1980s. In 1981, the average interest rate for a 30-year fixed-rate mortgage was around 18%, which is significantly higher than current rates. This was a result of the Federal Reserve’s efforts to combat inflation by raising interest rates, which had the effect of making borrowing more expensive. The high interest rates of the early 1980s had a significant impact on the housing market, causing home sales to drop and prices to decline. Since then, interest rates have generally trended downward, with some fluctuations along the way, and have been at historically low levels in recent years.

Mortgage rates in the United States have gone up and down over time in response to changes in the economy, inflation, and other factors. Historically, mortgage rates have been affected by factors such as the supply and demand for money, the health of the housing market, and the actions of the Federal Reserve.

Rates have increased slowly over the past 2 years but are still holding relatively low.  When thinking about buying a home or refinancing it’s a good idea to determine what the short and long term benefits will be.  Pending your current living situation, buying is a great option.  With so many programs and easier qualifications available, financing a home has gotten easier.  36% of people living in the United States rent a home.  If you are renting you need to ask yourself, is this the best option? If you’re planning on staying put for awhile it might be a better option to buy a home.  Year after year a home gains equity, money that could be in your pocket instead of the landlord.  Having your own home gives you the freedom to make the updates you want.  Even though rates have been creeping up it’s important to analyze the cost of renting vs owning a home.  Mortgage brokers can give you monthly mortgage payments, explain programs and get you pre-qualified.

For homeowners looking to refinance it is important to analyze your current rate and terms.  While rates were in the 2% – 4% percent range many took advantage and bought or refinanced.  Since the pandemic (COVID 19) the economy has been impacted and in turn consumer debt (credit cards) has risen.  Unfortunately many of us have had to supplement our income with credit cards.  It’s important to analyze the amount of high interest debt being paid over time to a credit card versus the low mortgage rate you may have.  Regardless if refinancing the high interest credit card debt saves you thousands it’s important not to fall into using the credit cards again.  A mortgage broker can do a simple breakdown to see how much money you could save each month.

Find out if your eligible for a new home or a refinance today by calling us at 888-416-0920

About Brian Birk