Understanding the trends in mortgage rates can be difficult. When you look
Today mortgage rates seem to be all over the place. They can be high or low, depending on many factors. It is not always easy to know or even predict where mortgage rates will be from day to day. Looking over historic trends in mortgage rates can help you to see what to expect.
Today mortgage rates are influenced by the various factors that have been influencing them for the past 20 years. So, looking back to the 1980s can give you some interesting insight.
At the beginning of the 1980s The Home Savings and Loan Association made a drastic reduction in home mortgage rates. Rates at this time were at 12.75. In 1987, mortgage rates had fallen into the single digits. Paul Volcker left as the Chairman of the Federal Reserve and Alan Greenspan took over.
Many insiders worried about Greenspan, saying he was more political and that the election year in 1988 would surely play a part in his actions. Today mortgage rates are still impacted by Greenspan, who left office in 2006.
Rates in the 90s
Home sales were slipping by 1992. Rates were still low and the average home price was also low, but the economy was unstable, which was thought to be the problem with sales. In July of 1992 the rates were at 8.05 percent. By 1994, the Federal Reserve had begun to raise rates again due to inflation.
Short term rates were being raised, but there was fear that this was going to affect long term rates, too. By 1995, many home owners had refinanced due to the rates being some of the lowest in history. Near the end of the 90s, rates had stabilized to around 7.25 percent.
Today mortgage rates have been influenced by highs and lows. In 2001, mortgage rates saw a short term cut and a total of 11 cuts throughout the year. By 2003,
were down to 4.3 percent. By 2008, the real estate market was not in good shape. Home buying had drastically reduced. The market was unstable. Today mortgage rates are rising because of the instability and issues within the economy and the real estate market.
Mortgage rates are often uneasy. They are tied to many factors, both with the market and with politics. It is not always easy to tell where the rates may go. The Federal Reserve may make announcements about changes that cause private lenders to act quickly and abruptly change their rates. It is not something that can easily be predicted. When it comes to mortgage rates you have to take it day by day.
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