It’s that time again…adult fun with graphs. This time, I chose to focus on interest rate movement over the past 20 years, as mortgage rates are all the rage right now (what are mortgage rates based on?).
Specifically, I’ve singled out the widely-popular 30-year fixed rate mortgage, which recently fell to its lowest point on record, according to mortgage financier Freddie Mac.
Above, you’ll see a 30-year fixed rate graph that tracks movement since 1990, based on its January average each year.
Back in 1990, the 30-year averaged 9.90 percent, a far cry from the sub-five percent levels we’re enjoying today.
Five years earlier, rates were above 13 percent, and peaked at roughly 17.50 percent in 1982.
Since 2000, rates have fluctuated between five and eight percent, though they finally hit a record low 4.85 percent last week.
Unfortunately, the slide seems to be over, according to Freddie Mac CEO John A. Koskinen, who said last week rates are “as attractive as they’re ever going to be.”
At the same time, it’s worth noting that mortgage points charged by banks and lenders recently have averaged 0.7 percent, up from 0.4 percent a year ago.
Sadly, home prices continue to be overpriced and unaffordable, and we’ve chosen the low interest rate route as opposed to letting supply and demand sort things out.
This, as I’ve mentioned before, could make things difficult for prospective buyers a few years down the line, assuming prices stabilize and rates eventually rise to more typical levels.
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