I’m Mary Walden with economist MW welcoming you to the economic perspective. Today’s program looks at mortgage interest rates in perspective. Mike, there are grumblings among people looking to buy a home that mortgage rates have taken a jump. They are now averaging 5% for 30 year fixed rate contract. Put this rate in perspective for us. Is 5% close to an all-time high?
- Not even close
- Only appear high because 2 years ago they were under 3.5%
- But they are still historically low
- For the 40 years prior to 2008, 30-year fixed rate were never under 5%
- Indeed, if you were looking to buy a home in the late 1970s or early 1980s, good luck – mortgage interest rates were double digit, and peaked at over 18% in 1981
- Conclusion – rates are not high now – instead, they were abnormally low before
- Now they are moving toward normal
And I’m Mary Walden for the Economic Perspective, an NC State Extension program from the Department of Agricultural and Resource Economics.