Mortgage Interest Rates: History & Trends

ByNathan Paulus
Contributions by3 experts
ByNathan Paulus
Contributions by3 experts

Updated: May 22, 2024

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Overview of Mortgage Rates in the US

Mortgage interest rates are the percentage of your loan amount that you will pay in interest each year. In the U.S., mortgage rates are steadily rising. The current fixed rate mortgage average in the U.S. is 5.54%. Generally, higher mortgage rates make it more expensive for buyers to purchase a home, which can cool down a housing market through fewer sales.

Fast Facts on the History of Mortgage Rates


Understanding mortgage rates and their history is the key for first-time and potential homebuyers.

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Mortgage rates have fluctuated significantly over time thanks to changes in the country's economic environment.

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Mortgage rates peaked in the 1980s, hitting a historic high of 18.63% in 1981.

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A number of economic factors can affect a mortgage rate, such as the inflation rate, the prices of homes in an area and the general economic climate.



Historical Mortgage Rates in the United States

The history of mortgages in the U.S. can be traced back to the 1970s, fluctuating dramatically as the mortgage system evolved and became more sophisticated. In 2022 alone, the year kicked off with a 3.22% average for a 30-year fixed rate mortgage, hitting a peak of 5.81% in June. A high mortgage rate means potential home buyers must budget for a higher monthly mortgage payment.

Future mortgage rates are also difficult to predict as the economic climate, inflation and interest rates can all be factors. This means homebuyers may have difficulty figuring out when the best time to buy a home is.

30-Year Fixed Rate of Mortgage Rates in the U.S.

A 30-year fixed rate mortgage is a common type of rate in the U.S. It offers borrowers a stable monthly payment for the life of the loan and is typically used to finance primary homes.

The 30-year fixed rate mortgage began to rise in popularity in the 1970s and reached its peak in the early 1980s. The 30-year fixed rate mortgage has fluctuated since then, but over the past few years, it has mainly stayed stable. Several factors can influence the 30-year fixed rate mortgage, including inflation, the Federal Reserve's monetary policy and overall economic conditions.

15-Year Fixed Rate of Mortgage Rates in the U.S.

Similar to the 30-year option, a 15-year fixed mortgage is a type of home loan that offers a shorter term. It typically provides a lower interest rate than 30-year fixed mortgages while still giving borrowers the security of a fixed interest rate.

Several historical events and policy changes have influenced the trend of 15-year fixed rate mortgages. These include the Great Depression, the influx of baby boomers into the housing market and the recent subprime mortgage crisis. Despite these influences, the 15-year fixed rate mortgage has remained relatively stable, fluctuating between a low of 2.56% to a high of 4.52% after 2010.

Freddie Mac's Primary Mortgage Market Survey is MoneyGeek’s primary data source. This survey has been conducted every month since July 1971 to provide a snapshot of mortgage rates available to consumers. Their latest report says the housing market remains sluggish due to a second weekly increase in mortgage rates.

Consumer concerns about rising rates, inflation and a potential recession manifest in softening demand. These factors will likely cause a noticeable slowdown in the growth of home prices. This report is used by mortgage lenders, home builders, financial analysts and others in the industry to understand market trends better and make sound decisions.


High inflation and volatile mortgage rates characterized the 1970s. In 1971, rates for 30-year fixed-rate mortgages varied between 7.29% and 7.73%; by the end of 1978, however, they had risen to 10.38%. Inflation continued to spike throughout the 1980s, so lenders increased rates to keep up.

Mortgage Rates 1971-1979 United States

The 1970s indeed saw significant inflation and fluctuating mortgage interest rates. This was partly due to the high inflation rates of the time, which peaked at 11.2% in 1974, as lenders increased their rates to keep up. Unfortunately, this led to even more volatility for borrowers, with rates for 30-year mortgages rising as high as 16.35% by the 1980s.

The end of the Vietnam War, the Great Inflation and the Energy Crisis of the 1970s are a few notable events that occurred during this time. Despite these challenges, however, many Americans were still able to purchase homes and take out mortgages during this time.


Mortgage rates and rising inflation dominated the 1980s, with 30-year fixed mortgages peaking at 18.63% and inflation reaching 11.6% in 1981. Throughout the 1980s, the lowest 30-year average for fixed mortgages was 9.03%, while inflation only hit a low of 3.8%.

Mortgage Rates 1980-1989 United States

The Federal Reserve exercised greater control over reserve and money growth to combat inflation, implementing the Monetary Control Act in 1980. While the strategy worked, it also increased mortgage interest rates, which remained high throughout most of the 1980s. Despite this, by 1982, the country's inflation levels had normalized, and the Federal Reserve's strategy was successful. However, because mortgage rates remained high, many people could not buy homes during this time.


Mortgage rates finally fell below 10% in the early 1990s, giving homeowners with mortgages from the 1980s a chance to refinance and save money. While rates peaked at 10.67% in early 1990, they eventually started to fall in the following years. This low-rate environment spurred a refinancing boom, allowing many homeowners to refinance multiple times.

Mortgage Rates 1990-1999, United States

Thanks to inflation being kept under control, the low-rate environment of the 1990s allowed many homeowners to refinance their mortgages multiple times, with rates briefly dropping below 7%. This created a refinancing boom, as homeowners could reduce their monthly payments by refinancing from higher interest rates to lower ones.

The low mortgage rates of the 1990s led to a housing boom as well, as more and more people could afford to purchase a home. This saved homeowners hundreds of dollars every month, which they could use for other purposes such as investing or saving for retirement.


Mortgage rates generally fell in the 2000s. By 2003, 30-year fixed rate mortgages had settled between 5% and 6% and remained for the rest of the decade. In the latter 2000s, the highest rate was in mid-2006 when rates jumped to 6.79%.

Mortgage Rates 2000-2009 United States

The mortgage business changed in the 2000s. The housing market experienced record lows compared to previous decades, encouraging the rapid growth of the housing market. It even prompted the rise of the subprime market, which led to more borrowing and risk-taking. This eventually led to the housing crisis and the Great Financial Crisis of 2008.

Mortgage rates fell to previously unheard-of lows as investors sought safe havens for their funds in the wake of the crisis. The housing crisis led to many people losing their homes and made it difficult to get mortgages, which caused the rate to increase.


In the 2010s, 30-year fixed rate mortgages hit a record low of 3.32% and a high of 5.21%. Within this decade, the housing market recovered slowly from the Great Financial Crisis of 2008.

Mortgage Rates 2010-2019, United States

The decrease in mortgage rates was primarily due to the housing market recovering from the Great Recession in 2008. At the time, the crisis caused many homeowners to default on their loans, resulting in banks being left with many foreclosed homes. Banks began to charge higher interest rates on new loans to compensate for their losses, making it harder for people to obtain mortgages and decreasing the demand for housing. With fewer people looking to buy homes, prices began to fall, leading to even more foreclosures.


Mortgage rates steadily dropped at the beginning of the 2020s, reaching a historic low of 2.65% at the beginning of 2021. However, 2022 signaled the beginning of a new rise in mortgage rates. Rates reached a peak of 5.81% in June, likely due to the COVID-19 pandemic, as businesses and homebuyers opted to play it safe with their finances.

Mortgage Rates 2020-July 2022, United States

There were many ups and downs throughout the first two years of the 2020s. For instance, the 30-year mortgage rate hit a new low in January 2021 but spiked just over a year later.

The fluctuation and rise in mortgage rates were most likely brought on by the COVID-19 pandemic, which affected Americans and individuals all over the globe in early 2020. However, despite the Federal Reserve increasing interest rates to battle inflation and stabilize the economy, it did little to ease the mortgage market. Therefore, while rates reached historic lows, many Americans could not take advantage of these low rates due to high housing prices and other economic factors.

Mortgage Rates and Median Sales Prices

The graph below shows the relationship between historical mortgage interest rates and median sale prices. This information could be valuable to potential home buyers deciding whether to buy a home at a particular time.

Comparative Graph between Historical Mortgage Rates and Median Sale Prices of Homes, United States

The graph compares historical mortgage interest rates to median sale prices of homes over time. Beginning in the 1970s, mortgage rates slowly fluctuated within the 7% range, peaking at 11.58% in 1985 and again in 1987. On the other hand, home prices never fell below $25,000 after 1971.

Generally, rising home prices make it more difficult for individuals to buy and afford a home — even as mortgage prices fall. Additionally, it makes it more challenging to save for a down payment or be approved for a loan as the ordinary person's wages have not kept up with the property prices. This is particularly valid for first-time homeowners looking to get into the market.

If this trend continues, it could eventually price many people out of the housing market altogether. This would have severe implications for the economy as a whole, as housing is one of the main drivers of growth. Therefore, monitoring this pattern in the coming years is crucial to see if it changes.

Factors Affecting Mortgage Rates

Potential homeowners are paying close attention because mortgage rates are at an all-time low. But what factors influence mortgage rates?


Interest Rates

An interest rate is how much a borrower will pay on top of their capital or borrowed amount, mostly as the “cost of borrowing money.” Your monthly payments will increase as the interest rate rises. Thus, it is important to remember this when shopping for a loan.

Economic Growth

When the economy is strong and growing, mortgage rates tend to be higher than when the economy is struggling. This is because the demand for loans is higher when the economy is doing well, and lenders can charge higher interest rates.

The Federal Reserve

When the Federal Reserve raises interest rates, it becomes more expensive for banks to borrow money, and they will often pass on these higher costs to consumers in the form of higher mortgage rates.


A high unemployment rate indicates an increase in defaults and foreclosures. This, in turn, results in higher mortgage rates.


Generally, mortgage rates tend to be higher when inflation is higher. This is because when prices rise, lenders want to ensure a return on their investment greater than the inflation rate.

Several factors can affect mortgage rates, including interest rates, economic growth, inflation, the Federal Reserve and unemployment. These factors can work together to cause rates to go up or down depending on current conditions. Mortgage rates, for instance, will probably be higher than they would be if the economy were struggling and unemployment was high. Thus, borrowers should consider these factors when shopping for a home loan to get the best rate possible.

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Finding the best interest rate could seem unattainable with so many options available. How can you choose which is best for you? MoneyGeek's calculator will help you compare rates and find the best deal for your needs.

History of Mortgage Rates FAQ

Mortgage rates are important for people looking to buy a home. Here are some of the most frequently asked questions and answers about mortgage rates.

How are mortgage rates determined?
How do housing prices affect mortgage rates?
How do credit scores affect mortgage rates?
How can I find the most affordable mortgage rate?
Should I lock in my mortgage rate?

Expert Insights on the History of Mortgage Rates

To further clarify mortgage rates and their associated history, MoneyGeek reached out to a few experts in the field.

  1. How can future home buyers determine the best time to purchase a home?
  2. What are the biggest contributors to cooling mortgage rates based on past historical data?
  3. From a home buyer standpoint, can fixed mortgages still adjust after locking in? If so, under what conditions?
Edward D Re
Edward D ReProfessor at Pratt Institute
Cliff Auerswald
Cliff AuerswaldPresident of All Reverse Mortgage, Inc.
Eyal Pasternak
Eyal PasternakFounder of Liberty House Buying Group
Matt Gray, CFP®
Matt Gray, CFP®Founder of AnthroFiWealth Group

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About Nathan Paulus

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Nathan Paulus is the Head of Content Marketing at MoneyGeek, with nearly 10 years of experience researching and creating content related to personal finance and financial literacy.

Paulus has a bachelor's degree in English from the University of St. Thomas, Houston. He enjoys helping people from all walks of life build stronger financial foundations.