Are 2024 Mortgage Rates Ordinary or Outrageous?
Rightfully so, Real Estate is often the talk of the town. Whether it is the news, social media, or Billy at the cookout, it seems that no matter where you go, the real estate market is always on top of the conversations. Some say that interest rates are at an ALL TIME HIGH and others say they are EXACTLY where they should be. You will hear horror stories of someone buying their first house at a 15% Interest Rate and dreamy stories of someone buying their home at a measly 2.7% Interest Rate. So what is the reality of this talk? I have gathered data points and quotes from multiple sources and am displaying them together in an attempt to educate, ease, and paint a picture of today's mortgage rates.
Introducing the first source, USNews.com. The following excerpt is from an article titled, Historical Mortgage Rates: See Averages and Trends by Decade. This is highlighting the reality of Mortgage rates over the last 50 Years.
Mortgage rates have been historic in their own right during the past few years. The average 30-year fixed rate reached an all-time record low of 2.65% in January 2021 before surging to 7.79% in October 2023, according to Freddie Mac.
But when someone points out that mortgage rates are painfully high right now, a well-seasoned homeowner is quick to chime in, "When I bought my first house in the '80s, the interest rate was 13%!" In fact, mortgage rates have gone as high as 18.63% in October 1981.
By historical standards, today's mortgage rates are pretty on par with what homeowners have paid in the past. Since Freddie Mac began tracking rates in April 1971, the median 30-year mortgage rate is 7.41%. However, it's still true that rates are high by modern standards, since the typical rate observed over the past decade is under 4%.
The following chart is data compiled by Journey Home Real Estate from This Article
With this being said, in my opinion, we are not far off from where we should be. Historically speaking, over the past 3 years, the median interest rate has been actually LESS than the previous 49 Years. With that being said, I'm not suggesting rates to be higher than they currently are. With the median 30-year Fixed Rate Mortgage Rate being 3.51% over the past 3 years, rates today are significantly more, however still where we should be.
- The 30-year FRM averaged 6.66 percent as of January 11, 2024, up from last week when it averaged 6.62 percent. A year ago at this time, the 30-year FRM averaged 6.33 percent.
- The 15-year FRM averaged 5.87 percent, down from last week when it averaged 5.89 percent. A year ago at this time, the 15-year FRM averaged 5.52 percent.
This quote, coming straight from the government-sponsored website, Freddiemac.com, displays current 30-year FRM Rates and 15-year FRM Rates. This data shows that current rates are not far off from the historic median. The real estate market will continue to be volatile as always and just like any other market will have its ups and downs. For a market update, reach out to me via phone or email and I will ensure to give you a current market update in the Lehigh Valley!