Are Rates High?
Yes, rates are 2% higher than they were when they bottomed out after COVID hit and they are back to the 2009 levels, but are they “high?”
No. Not even close when we look at the history of rates over the last 50 years.
Here is a link to an excellent interactive graph that shows average 30-year rates since 1971, and at the bottom of this blog is a screenshot of that graph from the date this blog was posted.
In 1971, the average rate was over 7%; in 1979, it was over 15%; and in 1981, it was over 18%, as every boomer likes to remind “these darn kids today.” 😊
Rates hovered in the 10% range throughout the 1980s (when the economy boomed), and they hovered in the 8% range for most of the 1990s, dropping below 7% only on rare occasions.
Prior to the 2008 meltdown, rates hovered in the 6% to 7% range, and only dropped into the 5% range after the economy collapsed.
So, while rates are higher than our recent “all-time lows,” they are still far lower than where they have been for most of the last 50 years.
So, hopefully that puts today’s rates into proper perspective. Simply put – they are not that high.
I might add once again too that rates are very likely to fall in response to a recession, so even today’s rates will probably not last long.
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