Realty411 Magazine Featuring Scott Meyers | Page 88
Interest Rate History:
1971 2018
Between 1971 and 2018, 30
year fixedrate mortgages have
ranged between a low of 3.31% in
2012 to a high of 18.63% in 1981.
Fixedrate mortgages are still
hovering near historical lows at
present and in recent years. An
estimated 60%+ of mortgage
holders are paying fixedrates on
their residential owneroccupied
properties somewhere within the
3.00% and 4.90% rate ranges as
of 2015, per data released by
Freddie Mac.
During this same 47year
timespan (1971 2018), the average
30year fixedrate mortgage was
near 8.08%. This rate is almost
double the average 30year fixed
rate mortgage loan between 2010
and 2019. Because the ease of
qualification and the affordability
of mortgage loans is typically the
most important factor behind a
booming or busting housing
market, the more recent 3% to
5% rate ranges over the past 10
years has helped fuel a stronger
housing market with rapid
appreciation rates as well.
Most often, owneroccupants
are using some type of a
governmentbacked or insured
mortgage loan and / or secondary
market investor to purchase their
properties. These loans include
FHA, VA, Fannie Mae, and
Freddie Mac. The typical down
payment ranges used to purchase
these properties are very likely to
average somewhere within the
0% to 3.5% down payment range.
Many times, the seller provides a
credit towards most of the closing
costs and / or another family
member assists with the down
payment as a gift of some sort.
If so, a very high percentage
of owneroccupied home buyers
have purchased their homes with
little to no money down out of
their own pocket prior to
qualifying for taxdeductible
mortgage payments that were
less than a nearby apartment to
lease. Additionally, these same
homeowners have boosted their
overall net worth after the vast
majority of residential properties
have appreciated at significant
annual percentage rates. In some
cases, homes have double in
value in less than five to seven
years due to the combination of
affordable mortgage loans,
easier mortgage underwriting
approval processes, and increasing
demand for properties to purchase.
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