Getty Images
Even though today’s mortgage rates are high compared with a few years ago, they’re actually typical from a historical perspective.
Mortgage rates have been historic in their own right during the past few years. The average 30-year fixed rate reached an all-time record low of 2.65% in January 2021 before surging to 7.79% in October 2023, according to Freddie Mac. And in late 2024, rates finally moderated, coming down into the low-6% range as the Federal Reserve kicked off an expected series of rate cuts.
But when someone points out that mortgages are still painfully expensive right now, a well-seasoned homeowner is quick to chime in, “When I bought my first house in the ’80s, the interest rate was 13%!” In fact, mortgage rates have gone as high as 18.63% in October 1981.
By historical standards, today’s mortgage rates are pretty on par with what homeowners have paid in the past. Since Freddie Mac began tracking rates in April 1971, the median 30-year mortgage rate is 7.37%. However, it’s still true that rates are high by modern standards, since the typical rate observed over the past decade is about 4%.
Keep reading to learn more about how mortgage rates have changed over time, what moves interest rates and how rates have impacted the housing market throughout history.
Compare:
Compare Current Mortgage Rates
Historical Mortgage Rates Chart
A Flourish chartHistorical Mortgage Rates by Decade
| Minimum Mortgage Rate | Maximum Mortgage Rate | Median Mortgage Rate | |
| 1971-1979 | 7.23% | 12.9% | 8.89% |
| 1980-1989 | 9.03% | 18.63% | 12.82% |
| 1990-1999 | 6.49% | 10.67% | 7.88% |
| 2000-2009 | 4.71% | 8.64% | 6.18% |
| 2010-2019 | 3.31% | 5.21% | 4.03% |
| 2020-Present | 2.65% | 7.79% | 5.1% |
The graphic above shows how mortgage rates have fluctuated over the past five decades. It’s evident that while today’s mortgage rates are high compared with just a few years ago, they’re actually quite typical from a historical standpoint.
Of course, you can’t talk about the history of mortgage rates without comparing other metrics like home prices and incomes. The median price for new single-family homes sold in the U.S. during 1981 – when mortgage rates reached record highs – was $68,900, according to Census Bureau data. That would be equivalent to around $230,000 in today’s dollars, using the consumer price index inflation calculator. Meanwhile, the actual median new home sales price is $429,800 as of August 2024.
The monthly mortgage principal and interest payment on a home at 1981 prices with an 18% mortgage rate would be $831, assuming a 20% down payment and using our mortgage calculator. On the other hand, a home at today’s prices and a 6% rate would come with a monthly P&I payment of nearly $2,100. But don’t forget to account for inflation: That $831 housing payment in 1981 would cost $2,800 today.
Lastly, consider earnings versus housing expenses. The median household income in 1981 was $22,390 per the Census Bureau, and that salary would be equivalent to about $75,460 today. The observed household income in the U.S. was $80,610 in 2023, according to the most recent census.
All told, housing affordability is actually fairly similar to what it was in the ’80s, but remember the context: Housing affordability was at record-low levels back then. So next time you hear about how high mortgage rates were in 1981, keep in mind that homebuying conditions are just as challenging now – even though rates are so much lower.
https://money.usnews.com/loans/mortgages/articles/historical-mortgage-rates
