The Average 30 Year Fixed Mortgage Rate
If you're looking at a 30-year fixed rate for your mortgage, you are taking on risk but also getting some security. If the previous 30 years are any indication, there is no telling where interest rates could go, but considering that this century has seen the lowest rates ever, it's hard to imagine rate returning to such levels, unless another deep recession hits.
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The 2000s
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The highest interest rates for 30-year fixed mortgages seen this century were at the beginning. In 2000, these rates were as high as 8.5 percent. These numbers eventually leveled off to roughly between 5.5 and 6.5 percent for a number of years thereafter. Then the Great Recession hit. A 30-year fixed-rate mortgage could be had for as little as 4.6 percent in November 2010. As of 2011, rates rebounded but were barely above 5 percent.
The '90s
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The start of the 1990s continued a trend of high mortgage rates from the 1980s. However, rates soon came down to what many could consider reasonable levels. In 1990, a 30-year fixed-rate mortgage was going for about 10.75 percent. Numbers dropped but then rose to almost 9.4 percent, the last time we reached that high. The rest of the decade saw number fluctuate from about 7 percent to around 8 percent.
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The '80s
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Comparing 30-year fixed-mortgage rates from the 1980s to today may stop some hearts -- the early 1980s saw rates at bounce between 12 percent and 16 percent, about three times more than what Americans saw in 2011. Numbers dropped by the middle of the decade to about 12 percent. By the end of the '80s, 30-year fixed mortgage rates were down to about 10 percent.
Influences on Mortgage Rates
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The health of the economy is responsible for the movement of mortgage rates. In a healthier economy, rates will be higher since Americans are more likely able to pay for and afford a higher 30-year fixed rate. A weak economy causes the opposite effect. The amount of confidence people have in capital markets plays an important role in increasing or lowering interest rates as well.
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References
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