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Thanks to Freddie Mac, there’s solid data available for 30-year fixed-rate mortgage rates beginning in 1971.

Rates in 1971 were in the mid-7% range, and they moved up steadily until they were at 9.19% in 1974. They briefly dipped down into the mid- to high-8% range before climbing to 11.20% in 1979. This was during a period of high inflation that hit its peak early in the next decade.

In both the 1970s and 1980s, the United States was pushed into a recession caused by an oil embargo against the country. The Organization of the Petroleum Exporting Countries (OPEC) instituted the embargo. One of the effects of this was hyperinflation, which meant that the price of goods and services rose extremely fast.

To counteract hyperinflation, the Federal Reserve raised short-term interest rates. This made money in savings accounts worth more. On the other hand, all interest rates rose, so the cost of borrowing money increased, too.

Interest rates reached their highest point in modern history in 1981 when the annual average was 16.63%, according to the Freddie Mac data. Fixed rates declined from there, but they finished the decade around 10%. The 1980s were an expensive time to borrow money.

In the 1990s, inflation started to calm down a little bit. The average mortgage rate in 1990 was 10.13%, but it slowly fell, finally dipping below 7% to come in at 6.94% in 1998.

According to a paper published by the Economic Policy Institute, one big reason for the economic growth and declining inflation seen later in the decade was the arrival of the internet in the mainstream consciousness. The increased investment in research and development of new technologies spurred a ton of economic growth.

Mortgage rates steadily declined from 8.05% in 2000 to the high-5% range in 2003. However, it wasn’t all milk and honey in this decade.

The housing crash happened in part because property values declined steeply until they hit their lowest point in 2008. This left many homeowners owing more on their homes than the property was worth. To provide some relief and to stimulate the economy, the Federal Reserve cut interest rates to make borrowing money cheaper.

Short-term rates, or the rates at which financial institutions borrow money, ended up being slashed to the point where they were at or near 0. This made it extremely cheap for banks to borrow funds so they could keep mortgage rates low.

As a result of this change, mortgage rates fell almost a full percentage point, averaging 5.04% in 2009.

Riding the wave of low bank borrowing costs, mortgage rates entered the new decade around 4.69%. They continued to fall steadily and were in the mid-3% range by 2012. In 2013, rates went up to 3.98%. A big reason for this was that the bond market panicked a little bit when the Federal Reserve said it would stop buying as many bonds.

When there are fewer buyers available, the yields on mortgage bonds have to go up to attract purchasers. This also causes mortgage rates to rise. Rates went up to 4.17% in 2014. In 2015, mortgage rates fell back to 3.85% as the market calmed down.

Although they were a little higher to end the year, rates in 2016 averaged 3.65%. With global turmoil, investors flocked to the safety of the U.S. bond market to guarantee the steadiness of their investments.

Rates began to rise after the 2016 presidential election. They reached their peak at the end of 2018/start of 2019. Rates on a 30-year fixed rate mortgage (FRM) ran between 3.95% on the low end and 5.34% on the high.

Rates declined throughout 2019. When January 2020 came around, the average rate for a 30-year fixed was about 3.7%.

Then COVID-19 hit the United States. In response, the Federal Reserve dropped the federal funds rate to between 0 – 0.25%. This caused other short-term and long-term rates to drop.

This move was made to encourage borrowing on home loans, as well as other loans. It also led to a large increase in refinance and mortgage applications. By December, Freddie Mac reported an average mortgage rate for a 30-year FRM sitting at 2.68%.

Mortgage rates then hovered within the same range for the first half of 2021. The June rate increased slightly to 2.98%. Since then, rates have started to edge upward. As of October 21, Freddie Mac reported an average mortgage rate for 30-year FRM of 3.09%. Mortgage rate forecasts predict a continued increase by year’s end, which some attribute to inflation driven by temporary supply-chain issues. That could make 2021 – 2022 a good time to consider refinancing.