The History of US Interest Rates



Interest rates have started to climb and with each 25 basis point increase, affordability for home owners will be impacted. Everyone is buzzing about the higher rates but the truth is, we've been spoiled for several years by historically low rates and a look back at the 1980's should put things in perspective.


Here's a look at the history of US 30-year fixed mortgage rates since 1971. It's clear that rates are sensitive and constantly adjusting.......it's like a roller coaster ride so hang on and take a ride:


  • 1971 - rates were in the mid-7% range

  • 1974 - rates moved up to 9.19%

  • 1979 - by the end of the year they were around 11.20%

  • 1981 - annual average rates were at 16.63% and peaked in October at 18.45% (Yikes)

  • 1989 - rates finished the decade around 10%

  • 1990 - the average mortgage rate was 10.13%

  • 1998 - rates dipped to 6.94%

  • 2000 - rates rose again to 8.0%

  • 2003 - rates were down to around 5%

  • 2009 - due to the Great Recession, rates averaged 5.04%

  • 2010 - rates were around 4.69%

  • 2012 - rates were in the mid 3% range

  • 2013 - rates went up to 3.98% when the bond market panicked when the Federal Reserve said it would slow it's purchase of bonds

  • 2014 - rates were up again to 4.17%

  • 2015 rates declined again to 3.85%

  • 2016 rates averaged around 3.65%

  • 2018/2019 - rates went from a low of 3.95% to a high of 5.34%

  • 2020 - average rate was around 3.7% and then COVID hit.....new lows ending with 2.68% in December 2020

  • 2021 - throughout the year rates fluctuated between the mid 2's and ended the year a little over 3%

  • 2022 - we started the year around 3.45% and as of May 1, 2022, we're heading over 5% again

Overall, we are still in pretty good shape and very thankful that we aren't anywhere near the 1980 highs. It will be interesting to see what happens over the next 6 months. Recession, inflation, the crisis in Ukraine and supply chain issues.....there is a lot going on so hang in there and remember...what goes up must come down!

Source: Freddiemac.com