Something that is on the mind of most people these days, so I wanted to take a quick look at some of the numbers over the past 40-ish years to get some perspective. From 1980 to present, here are some numbers that may (or may not) surprise you.

The highest mortgage interest rate seen during this time is 18.63% on October 9, 1981. 18.63%! Yikes! The average sales price for a home in the Kansas City area for 2022 was $336,102, if you were to take out a mortgage loan for that amount at the 1981 rates, your monthly payment would be $5,238. Ouch.

However, the lowest rates were on 1/7/2021 when rates dropped to 2.65%. Good for a $1,354 per month payment.

Right before the 2008 housing bubble burst, rates averaged 6.25% from 2006-2008. At this time, loans were considered cheap. Which was part of the problem, sure, but the bad loans being written at the time were the culprit in the crash. But it is food for thought that the rates at that time were not too far off from today’s numbers. Interesting to note what was considered “cheap” then, now feels much different.

For the entire 42 years from 1980 to the end of 2022, mortgage interest rates averaged 7.52%. With lots of swings up and down, it is of note that the overall average rate was 4.87 points higher than the lowest, but 11.11 points lower than the highest rate. So, we have trended more towards the lowest rate than highest. I think that is a clear sign that when rates do jump, they don’t tend to stay there very long. Some good news for those who are concerned about the current situation.

That 7.52% on that $336,102 mortgage is good for a $2,355 monthly payment.

Lastly, let’s look at the rate for today (1/9/23), the average for today right now is 6.47%. Or $2,118 per month on that $336,102 loan. So, 1.05 points lower and $237 per month savings compared to the average mortgage rates for the past 42 years.

Looking at these numbers side by side, it is obvious that the 2.65% in January of 2021 was great, and even the 3 and 4%’s of early 2022 were awesome as well, and I know 6.47% feels like a HUGE problem, but when you take it all into context with history, that 6.47% is still a deal compared to the average loan rate. So if you are looking to buy, you should feel good that you will still get lower than average rate.