Are Today’s Mortgage Rates the Highest We’ve Ever Seen?

If you look at any news site, you’ll see headlines about how mortgage rates are going up. But, are they the highest mortgage rates we’ve seen in US history?

If you were planning on buying a house in the near future, it’s understandable that you might be concerned about these high rates. However, when you know why rates go up and down, you might feel a little less anxious about the state of the housing market. 

What causes mortgage rates to fluctuate?

How do the Fed, inflation, and recessions affect mortgage rates? Consider each of these elements as jigsaw pieces that, when put together, show the median mortgage rate for any given time period. 

Federal Reserve

The Fed regulates the country’s monetary policy. This federal agency aims to maintain steady prices and employment, as well as set long-term interest rates. When they set the interest rate, it directly impacts the banks’ lending rates. Stable prices are necessary to quell raging inflation, but it’s consumers who suffer the consequences and pay more for everyday goods. 


Inflation is what happens when the cost of things increases but the buying power of the dollar decreases. Last week, you could spend $100 on groceries, but today you could be paying $110 for the same things. 


The NBER says that a recession is “a big drop in economic activity that lasts for more than a few months.” Mortgage demand is reduced when unemployment rises during recessions. If you can buy a house during a recession, it may be good for you because interest rates go down and homeowners who are facing foreclosure may be eager to sell quickly to avoid losing their home.

Historical Trends of US Mortgage Rates

Was the house your parents or grandparents bought better value? Mortgage rates have changed dramatically over the decades. The difference between mortgage rates from the ’50s and the ’70s could be thousands, if not tens of thousands of dollars during the life of the loan. 

Mortgage Rates in the ‘70s: 7.38% to 11.2%

At the beginning of the decade, mortgage interest rates were around 7.38%, but by the end of the decade, it rose to 11.20!  The 1973 oil embargo caused fast inflation, layoffs, and wage stagnation, causing “stagflation.” Outcome? Risk-based mortgage rates.

Mortgage Rates in the ‘80s: 13.74% to 10.32%

The Fed established an aggressive monetary policy in the early 1980s to control inflation in the late 1970s, which was caused by the Iran crisis.

Mortgage Rates in the ‘90s: 10.13% to 7.44%

In the ’90s, buyers could finally relax because, after the Vietnam War, Iran crisis, and Gulf War, the country was at peace. Over a decade, inflation declined from 5% to 2%.

Mortgage Rates in the 2000s: 8.05% to 5.04%

In the early 2000s, mortgage rates started to rise, but then fell to levels lower than ever recorded by Freddie Mac. Then in 2008, the housing bubble popped, prompting the Fed to drop rates to zero.

Mortgage Rates in the 2010s: 4.69% to 3.94%

Housing demand barely budged during the 2010s. Although 69% of Americans were homeowners in 2010, that figure dropped to 62.9% by 2016. Due to poor demand, lenders tried to appeal to buyers by lowering mortgage rates.

Mortgage Rates from 2020 to Today: 3.11% to 7.08%

For young buyers, today’s mortgage rates are around the same as they were in the 90s, but it’s still a hard pill to swallow, considering how bad inflation is at the moment. However, if you’re in the process of finding a Realtor® to begin the buying or selling process, don’t feel like you have to put things on pause. Will interest rates continue to surge? It’s hard to tell because things can change rapidly, but an experienced agent will be able to give you the best advice.

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