Keeping It REAL - by Bettsy Tyler

In July, the average 30-year fixed-rate mortgage fell below 3% for the first time in history. 1 And while many Americans have rushed to take advantage of this unprecedented opportunity, others question the hype. Are today’s rates truly a bargain? While average mortgage rates have drifted between 4% and 5% in recent years, they haven’t always been so low. Freddie Mac began tracking 30-year mortgage rates in 1971. At that time, the national average was 7.31%. 2 As the rate of inflation started to rise in the mid-1970s, mortgage rates surged. It’s hard to imagine now, but the average U.S. mortgage rate reached a high of 18.63% in 1981. 3 Fortunately for home buyers, inflation normalized by October 1982, which sent mortgage rates on a downward trajectory that would bring them as low as 3.31% in 2012. 3 Since 2012, 30-year fixed rates have risen modestly, with the daily average climbing as high as 4.94% in 2018. 4 So what’s causing today’s rates to sink to unprecedented lows? Ec...