Mortgage rates historically 2024

Mortgage rates statistics

While mortgage rates are currently higher than they were in May 2021, more than doubling from 2.96% to 7.22% in three years, rates between 6% and 7% are far lower than some historical averages. Overall, mortgage rates are much lower than they were 20-plus years ago, even with recent increases.

In 1981, 30-year fixed mortgage rates reached an average high of 16.64%. That’s a 9.42 percentage point increase over the average rate for 2024. Rates for 15-year fixed mortgages, on the other hand, are getting close to previous highs. Compared to the highest rate in 1994 of 8.89%, the 2024 15-year fixed rate high is only 2.42 percentage points lower at 6.47%. So, while 30-year rates are still significantly behind record highs, 15-year fixed rates have almost reached the highest rates since the 1990s.

15-year mortgage average since 1992

Since 1992, mortgage rates for 15-year fixed loans experienced an overall decline until 2022. Likely due to post-COVID inflation and other market factors, these loans once again began to increase in recent years. As of May 2024, the current rate for 15-year fixed loans is 6.47%.

• Between May 2021 and May 2024, the average 15-year fixed mortgage rate increased by 184%.
• August 2021 marked the peak low for 15-year fixed loan rates, bottoming out at an average of 2.10%.
• In November 2023, rates peaked at 7.03%, the highest they’d been since 2000.
• Recent rates increased most dramatically between December 2021 and October 2022, from 2.30% to 6.36%.
• Current 15-year fixed loan rates are 27.2% lower than the 8.89% peak in December of 1994.

30-year mortgage rate history

Thirty-year fixed mortgage rates are generally higher than their 15-year counterparts, mostly to account for risk. While rates today are higher than they were in 2021, the current 7.22% as of May 2024 is still less than half that of the 1981 peak.

• Between May 2021 and May 2024, the average 30-year fixed mortgage rate increased by 144%.
• January 2021 marked the peak low for 30-year fixed loan rates, bottoming out at 2.65% on average.
• In October 2023, rates peaked at 7.79%, the highest they’d been since October 2000 (7.84%).
• Recent rates increased most dramatically between December 2021 and October 2022, from 3.05% to 7.08%.
• Current 30-year fixed loan rates are 56.6% lower than the 16.64% peak of 1981.

What affects mortgage rates?

Mortgage rates are impacted by seven primary factors. Each is outlined below.

Credit scores

Credit scores have a significant impact on the average mortgage rate. With an average FICO score of 757, it’s clear that the U.S. mortgage market is dominated by borrowers with very good to excellent credit scores. While this doesn’t mean it’s impossible to get approved with lower credit, lower credit borrowers can expect much higher interest rates than their excellent credit counterparts.

For instance, the average 2024 30-year fixed mortgage rate for a borrower with excellent credit (760-850) is 6.516%. Comparably, the average rate for a borrower with low credit (<639) is 8.105%. That means low-credit borrowers can expect interest rates that are up to 24.4% higher than high-credit borrowers.

Average mortgage rates by credit score

Home location

The real estate market is different in every state, with factors like home price, home availability, local amenities, average down payment size and average borrower credit score fluctuating from location to location. All of these factors combined can have a massive impact on mortgage interest rates.

Home prices

As of Q1 2024, the average sales price for a home in the U.S. is $513,100. Although this is a 7.15% decrease from the peak of Q4 2022, prices are still up significantly from the 2020 average of $389,800. Both higher-than-average and lower-than-average home loans can increase interest rates.

Given that the expected mortgage loan is the home price (including closing costs) minus the down payment, increasing home prices can impact average mortgage rates. For example, as home prices increase, buyers are less likely to be able to afford a 20% down payment. In turn, banks will assess smaller down payments on an expensive home as a higher risk, potentially leading to a higher mortgage interest rate.

Down payments

While conventional wisdom suggests a 20% down payment or more on home purchases, the average down payment for home purchases in the U.S. is only 14%. In fact, those over 58 years old are currently the only demographic providing down payments of 20% or more on their home purchases. The trend of younger generations being unable to afford larger down payments has a negative impact on mortgage rates.

That’s because larger down payments typically equate to lower interest rates, as lenders perceive a lower level of risk when you have more invested in a property. Buyers who can afford to put 20% down or more on their home can expect lower interest rates. When buyers can’t make down payments of 20% or more, lenders often require private mortgage insurance (PMI). This protects the lender if the borrower is unable to keep paying their loan but adds to the overall monthly mortgage cost.

Loan terms

Otherwise known as the time frame a borrower has to repay a loan, the most common loan terms are 15- and 30-year loans. Thirty-year loans account for around 90% of mortgages in the U.S., while 15-year loans account for only 6%.

Generally, shorter-term loans have lower interest rates but higher monthly payments. This is because banks associate longer loan terms with higher risk and often choose to offset that risk with higher interest rates. As of May 2024, the average 30-year fixed mortgage rate is 11.6% higher than the average 15-year fixed mortgage rate.

Loan types

There are different types of mortgage loans, with the most common being conventional loans, loans backed by the Federal Housing Administration (FHA loans) and Department of Veterans Affairs (VA loans). Conventional loans account for 62% of all U.S. mortgage loans, while the latter two options account for 29%.

Loan type can have a major impact on the average interest rate. For instance, the average 30-year fixed FHA loan has an interest rate of 6.86%, compared to 7.22% for a conventional loan. That means that, on average, FHA borrowers can expect an interest rate that’s 5% lower. VA loan rates are currently even lower — averaging 6.57%.

Average mortgage rates by loan type

How much mortgage debt is there in the U.S.?

As of 2023, total mortgage debt in the U.S. has reached roughly $20.24 trillion. Despite a drop in mortgage debt following the 2008 financial crisis, overall mortgage debt has been on the rise since 2012. Today, total debt is almost 38% higher than the 2008 peak of $14.7 trillion. Between 2012 and 2023, total mortgage debt increased by approximately 52%, from $13.34 trillion to $20.24 trillion.

Mortgage debt is influenced by a few different factors, with the primary driver being the number of home sales. The more homes sold, the more mortgages there are, adding to the volume of outstanding debt. Increasing home prices also contribute to increased debt, as the rising price of homes also causes gross lending and debt outstanding to rise. Conversely, high numbers of foreclosures, mortgage debt restructuring, and short sales can reduce mortgage debt.

Total mortgage debt over time

References

1. “30-Year Fixed Rate Mortgage Average in the United States.” FRED Economic Data. Evaluated May 11, 2024.Link Here
2. “15-Year Fixed Rate Mortgage Average in the United States.” FRED Economic Data. Evaluated May 11, 2024.Link Here
3. “Loan Savings Calculator.” myFICO. Evaluated May 11, 2024.Link Here
4. “Average Sales Price of Houses Sold for the United States.” FRED Economic Data. Evaluated May 11, 2024.Link Here
5. Shea, N. “Seven factors that determine your mortgage interest rate.” Consumer Financial Protection Bureau. Evaluated May 11, 2024.Link Here
6. “30-Year Fixed Rate FHA Mortgage Index.” FRED Economic Data. Evaluated May 11, 2024.Link Here
7. “30-Year Fixed Rate Veterans Affairs Mortgage Index.” FRED Economic Data. Evaluated May 11, 2024.Link Here
8. “30-Year Fixed Rate USDA Mortgage Index.” FRED Economic Data. Evaluated May 11, 2024.Link Here
9. “All Sectors; Total Mortgages; Asset, Level.” FRED Economic Data. Evaluated May 14, 2024.Link Here
10. “Household Debt and Credit Report (Q4 2023).” Federal Reserve Bank of New York. Evaluated May 11, 2024.Link Here
11. Rothstein, R. and Basile, C. “Mortgage Rates Forecast For 2024: Experts Predict How Much Rates Will Drop.” Forbes Advisor. Evaluated May 11, 2024.Link Here