A History of Mortgage Rates: What Does it Mean for Home Buyers?

Freddie Mac has been keeping records of mortgage rates since 1971, and these records provide valuable insight into trends in the housing market. Mortgage rates have a long and varied history. 30-year mortgage rates have been as low as 2.5% and as high as 18%.

Homeownership is one of the smartest financial decisions you can make. Not only does it provide peace of mind and a place to live called Home, but over time, it builds wealth in two ways: through appreciation and by serving as a hedge against inflation.

30/15/5-Year Fixed-Rate Mortgages Since 1971

Mortgage rates began to climb in the late 1970s and early 1980s, peaking at an average of 18.63% in 1981.
The Mortgage rates since 1971 have an average of 7.76%.

Despite the recent increases in interest rates, 30-year mortgage rates have been below the historical average of 7.76% since 1971.

Rising mortgage rates may seem like bad news for Home buyers, but it’s important to put things into perspective. Remember, interest rates are still below their historical average. Many Home Buyers or Investors are getting favorable rates with creative financing options even in today’s market.

Interest-Only mortgage payments
Buydowns
Seller Financing
40-year Mortgage
5/1 or 7/1 ARM

If you are Considering Buying a Home, you may be pleasantly surprised at how affordable Homeownership can be, even with today’s higher rates. Home loans are personalized to the borrower. Many factors Affect Mortgage Interest Rates, including credit score, down payment, loan type, loan term, loan amount, and discount points.

30-Year Fixed-Rate Historic Tables HTML / ExcelXls

15-Year Fixed-Rate Historic Tables HTML / ExcelXls

5-Year Adjustable-Rate Historic Tables HTML / ExcelXls

Homeownership over Long Term

Homeownership over the long term is one of the most effective ways of wealth development for you or your family while still enjoying the benefits of Homeownership.

In Santa Clara County, the Single-family Home’s Median Price was $565,000 in 2002 Q2 and $1,881,011 in 2022 Q2.

We calculate the rate of return on your investment appreciation despite many ups and downs over a period.

In Santa Clara County, the median price of a Condo/Townhome was $345,000 in 2002 Q2 and $1,034,422 in 2022 Q2.

The Interactive Housing Market data gives you Home Appreciation in various dimensions, such as Median Price, Average Price, and Average Price / SQ.FT. Please explore data for the year you purchased it and now.

The Return on Investment [ROI] in Homeownership is multiple times over the long term. The Home Appreciation rate is high, so your investment will increase in value over time, and Homeownership is a great way to develop wealth over the long term. Homeowners build a treasure of beautiful, priceless memories over time and are proud of home ownership in the community instead of renting. Pride in homeownership is an intangible value in many ways.

We looked at data from various Counties in the San Francisco Bay Area to see how Home prices have appreciated over time. Our findings may surprise you!

I am happy to discuss the data with you to make an informed decision.

Homeownership Hedge Against Inflation

Homeownership has always been a key part of the American dream. Not only does it provide a place to live for your family, but it’s also a great way to ensure that your money works for you. Homeownership offers numerous benefits, including building equity, creating a stable living environment for families, and investing in one’s community. Becoming a Homeowner is one of the best ways to protect your finances against inflation. As your Home appreciates, you’ll have built-up equity that can be used as a financial cushion in retirement.

Despite recent interest rate increases, now is an attractive time to purchase a Home.

Home prices have decreased in the past few months, which is a great Home-Buying opportunity.

“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful“ ― Warren Buffett

Many people worry about inflation. Owning your Home effectively hedges against the effects of inflation. It is important to consider all the factors when deciding whether to buy or rent a Home. Remember that owning a Home is cheaper than renting over the long term.