For many homebuyers, the last few years have felt like a perfect storm of trials – rising home prices and climbing mortgage rates limiting affordability.
Many people are now wondering if 2025 will finally reverse the trend.
While there’s no magical analysis tool to help to navigate market shifts, a look back at mortgage rate history can offer clues—and maybe even some hope for those waiting to make their move.
While the history of mortgage rates provides some good context, it’s important to understand that borrowers with healthy credit profiles and strong finances often get mortgage rates well below the industry norm.
A quick spoiler…the long term average for the 30-Year mortgage is just under 8%.
You can find out more here from Peter Miller and The Mortgage Reports…
Historical Mortgage Rates Graph
Current rates are more than double their all-time low of 2.65% (reached in January 2021). But if we take a step back and look at the history of mortgage rates, they’re still close to the historic average.
Freddie Mac — the main industry source for mortgage rates — has been keeping records since 1971. Between April 1971 and March 2025, 30-year fixed-rate mortgages averaged 7.73%.
The 30-year Fixed-Rate Mortgage Chart
Understanding mortgage rates history helps frame current conditions and shows how today’s rates compare to the historic mortgage rates averages.
Here’s how average 30-year rates have changed from year to year over the past five decades:
A Look at the Last 2+ Years
Mortgage interest rates dropped to historic lows during the COVID pandemic, actually falling below 3% in 2020 and 2021 due to crisis related moves by the Federal Reserve. These record lows gave way to a dramatic reversal as economic conditions changed.
By 2022, inflation surged, pushing mortgage interest rates to their highest levels in twenty years! Freddie Mac reported the average 30-year rate climbing from 3.22% in January 2022 to a peak of 7.08% in October, marking a significant shift in borrowing costs.
As we look back on 2024, rates have shown some fluctuation, including a temporary dip in September, but have yet to deliver consistent declines.
While the Federal Reserve implemented three rate cuts in 2024, its decision to hold rates steady in its first meeting of 2025 has tempered expectations.
However, optimism persists as many continue to expect potential rate reductions later in the year, especially with another Fed meeting approaching later this month. You can find out more regarding the Federal Reserve and mortgage rates here…
Historic Mortgage Rates: The Average
The long-term average for mortgage rates is just under 8 percent…and that’s according to Freddie Mac records going back to 1971.
But historical mortgage rates show that rates can fluctuate significantly from year to year, and some years have seen much bigger moves than others.
Will Rates Eventually Go Back Down?
Experts predict further declines, with the Mortgage Bankers Association and Wells Fargo forecasting the 30-year fixed mortgage rate could fall to between 5.5% and 6.0% by the end of this year.
More importantly, you can find my 2025 forecast here…
While the Federal Reserve held rates steady in its January meeting, the average 30-year fixed rate has edged lower in recent weeks, creating a more favorable market for buyers as borrowing costs ease.
As a borrower, it doesn’t make much sense to try to time your rate in this market – and you can find more on that here…
My best advice is to make that purchase when you’re financially ready and can afford the home you want — regardless of current interest rates.
Remember that you’re not stuck with your mortgage rate forever. If rates drop significantly, homeowners can always refinance later on to cut costs. Remember the key adage – “Marry the House but Date the Rate”…
In Conclusion
If you find the house that you are looking for, I recommend that you make that purchase, regardless of the interest rate.
Homes are appreciating at around 4% annually, so the longer you wait, the more expensive that home will be down the road. Also, it’s important to remember that average mortgage rates are only a general benchmark.
If you have good credit and strong personal finances, there’s a good chance you’ll get a lower rate than what you see in the news. So reach out to me to discuss your next steps!
The blog postings on this site represent the positions, strategies or opinions of the author and do not necessarily represent the positions, strategies or opinions of Guild Mortgage Company or its affiliates. Each loan is subject to underwriter final approval. All information, loan programs, interest rates, terms and conditions are subject to change without notice. Always consult an accountant or tax advisor for full eligibility requirements on tax deductions.
