Published on our October 2023 Newsletter

Question: “Will you put these recent rate increases into historical perspective for us?

Looking back, starting in the 1980’s by decade, on a Freddie Mac 30. Year fixed mortgage for a primary residence, the rates from the St. Louis Fed Survey looked like this:

1980’s – about 9.00%
1990’s – about 6.75%
2000’s – about 5.25%
2010’s – about 3.50%
2020’s – about 2.75% and we are currently hovering just under 8%

We’ve all gotten accustomed to the lower rates over the last 10 years. We are now entering a period where the rates are normalizing and that rate environment is more in line with historical rates. These current rates are more in line with what the “cost of money” should be based on the last four plus decades.