If you’ve been holding off on buying a home because of mortgage interest rates, it’s time to reconsider. Many buyers today believe that rates are too high, but when you look at the historical data, today’s rates are still relatively low. In fact, if you’ve been waiting for interest rates to return to the historic lows of 2020 and 2021, you could be waiting another 30 years.
A Look at Mortgage Rates Over Time
It’s easy to forget that interest rates fluctuate over time, and what we consider “normal” today might not align with historical trends. Let’s take a quick look at mortgage rates over the past several decades:
- 1980s: The average 30-year fixed mortgage rate was between 10% and 18%. In 1981, it hit an all-time high of 18.63%!
- 1990s: Rates dropped but still averaged between 7% and 9% for most of the decade.
- 2000s: Interest rates continued to decline, ranging from 5% to 8% before the Great Recession.
- 2010s: After the financial crisis, rates dropped to historic lows, averaging between 3% and 5%.
- 2020-2021: During the pandemic, mortgage rates plummeted to unprecedented levels, dropping below 3%—a once-in-a-lifetime opportunity.
Now, in 2024, rates have settled in the 6-7% range, which may feel high compared to the pandemic years but is actually in line with the long-term average.
Waiting for Lower Rates? You Could Be Waiting Years
If you’re waiting for rates to drop back to 2-3%, consider this: the last time mortgage rates were this low before 2020 was in the 1950s. It took nearly 70 years for rates to dip that low again. If history is any indication, we may not see those ultra-low rates again for decades.
In the meantime, home values continue to rise. Buyers who wait for lower rates may find themselves priced out of the market as home prices appreciate. Even if rates decline slightly in the coming years, they are unlikely to return to record lows.
Buy Now, Refinance Later
A smart strategy is to buy a home now at today’s prices and refinance if and when rates drop. Many lenders offer refinancing options with minimal fees, allowing homeowners to secure a better rate in the future.
If you’re ready to stop waiting and start building equity, now is the time to act. Reach out today to explore your options!
Elise & Tom Starr | 239-209-3960 | elise.luxuryproperty@gmail.com
