Lowest Mortgage Rates Since 1971 Are Here Now (CHART)

Rate shoppers and watchers should note that the lowest rates on official record are here now. The chart below shows rates from June 2010 back to April 1971, when Freddie Mac started officially tracking 30 year mortgage rates. The high was in October 1981, when then Fed chairman Paul Volcker was hiking rates to battle inflation (more on this below). At that time, borrowers paid an average of 2.3 points to buy a rate down to 18.45%. The low was May 27, 2010 when borrowers averaged 0.7 points to buy a rate down to 4.78%—note that 4.78% with 0.7 points was also achieved three times in 2009: April 2, April 30, and November 25. These are national average rates on loans up to $417,000 for single family homes with 20% or more equity in the property. Rates change daily as mortgage bonds trade.


In 1981, Volcker and his FOMC pushed the Fed Funds Rate to an average of 19% (compared to .25% today) in order to beat the 14.6% average inflation of the day (compared to 2.2% full and 0.9% ex-Oil&Energy now). This inflation battle caused two back-to-back recessions. The first one began in January 1980 and unemployment peaked at 7.8% in August 1980. The second one began in July 1981 and unemployment peaked at 10.8% in December 1982 (compared to 9.9% now).