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Some interesting historical perspective on key interest rates.
Posted on 9/4/26 at 11:02 am
Posted on 9/4/26 at 11:02 am
I frequently see certain people on this forum moaning about 30 year mortgage rates over 5% and God forbid the creep towards 7%.
Per Google AI here are some historical median and average key interest rates, let's assume Google AI is generally accurate with these numbers.
Historical median 30 year treasury/bond 5%
Historical average 30 year treasury/bond 5%
Historical median 10 year treasury/bond 3.7%
Historical average 10 year treasury/bond 4.25%
Historical median Fed Funds rate 4.25%
Historical average Fed Funds rate 5.4%
Historical median 30 year mortgage rate 7.23%
Historical average 30 year mortgage rate 7.68%
Current 30 year bond yield 5.25%
Current 10 year bond yield 4.78%
Current Fed Funds rate EFFR 3.63%
Current 30 year mortgage rate 6.75%
I think the current "hair on fire" over mortgage rates is ......well, interesting.
What do consumers get with cheap money and highly leveraged assets?
Higher prices and eventually a price correction.....and sometimes a financial meltdown that puts the US taxpayers on the hook for the financial/investment speculation that took place.
Per Google AI here are some historical median and average key interest rates, let's assume Google AI is generally accurate with these numbers.
Historical median 30 year treasury/bond 5%
Historical average 30 year treasury/bond 5%
Historical median 10 year treasury/bond 3.7%
Historical average 10 year treasury/bond 4.25%
Historical median Fed Funds rate 4.25%
Historical average Fed Funds rate 5.4%
Historical median 30 year mortgage rate 7.23%
Historical average 30 year mortgage rate 7.68%
Current 30 year bond yield 5.25%
Current 10 year bond yield 4.78%
Current Fed Funds rate EFFR 3.63%
Current 30 year mortgage rate 6.75%
I think the current "hair on fire" over mortgage rates is ......well, interesting.
What do consumers get with cheap money and highly leveraged assets?
Higher prices and eventually a price correction.....and sometimes a financial meltdown that puts the US taxpayers on the hook for the financial/investment speculation that took place.
This post was edited on 9/4/26 at 11:16 am
4
Posted on 9/4/26 at 1:28 pm to Bass Tiger
But if owning a home is part of the American dream, shouldn't that be a focus to keep costs low?
Posted on 9/4/26 at 1:29 pm to Bass Tiger
The 30yr fixed conventional mortgage rate never dropped below 7% before 2002 and never dropped below 5% until 2009 (QE).
We’re still at rates lower than historical averages before Fannie and Freddie failed and before the Fed got involved.
We’re still at rates lower than historical averages before Fannie and Freddie failed and before the Fed got involved.
Posted on 9/4/26 at 1:33 pm to Bass Tiger
quote:
What do consumers get with cheap money and highly leveraged assets?
Mortgages are securitized bonds.
Bond prices move in the opposite direction as rates. Rates drop, prices go up. Rates go up, prices go down. “Prices” in the mortgage world are loan amounts.
Rates go down, the more people can borrow, the more they can buy. If we want prices to go down, lowering rates won’t do it. It will get borrowers off the sidelines who can’t afford to buy homes now.
The supply side is what will bring prices down.
It’s the same idea as currency devaluation. The more there is, the less it’s worth. Put more houses out there so there’s more competition.
Posted on 9/4/26 at 1:35 pm to LSUSUPERSTAR
quote:First, why is it the government’s job to make the “American dream” artificially affordable? I’d reckon most men dream of shagging Sydney Sweeney. Should the government facilitate that?
But if owning a home is part of the American dream, shouldn't that be a focus to keep costs low?
Second, at what price should this “dream” be fulfilled? Money is a fungible commodity. If we flood the market with money to make things “affordable” we also raise the nominal cost of things. Subsidies always result in higher prices —that’s how we got here in the first place with housing, college, and medical costs.
Valuable things should be expensive. The desire to convert the valuable into the cheap isn’t a recipe for wealth. It’s a road to poverty.
Posted on 9/4/26 at 2:04 pm to Taxing Authority
Where do the mortgage companies borrow the money to give out a house loan? Who sets the base rate?
Posted on 9/4/26 at 2:33 pm to Bass Tiger
Always see all this bullshite online from the millennials that boomers had it easy b/c they all bought their houses dirt cheap and the home values all skyrocketed and made them all easy millionaires apparently.
I’m Gen X and paid a buttload of interest on my first house for the first 5 years, after I finally was able to get one and stop renting before I was able to eventually get it refinanced at a decent rate in a new 15 year mortgage. Went from paying $1k a month in interest and $300 in principal with the original 30 year note to the exact opposite with the better rate and the 15 year mortgage for an extra $500 a month in total payment.
My parents are boomers who bought in the 80’s when mortgage interest rates were at an all time historical high. 16%, that’s crazy. Millennials are full of shite with their victim mentality.
1980’s:
Highest average annual rate*
16.64% (1981)
Lowest average annual rate
10.25% (1989)
https://www.bankrate.com/mortgages/historical-mortgage-rates/
I’m Gen X and paid a buttload of interest on my first house for the first 5 years, after I finally was able to get one and stop renting before I was able to eventually get it refinanced at a decent rate in a new 15 year mortgage. Went from paying $1k a month in interest and $300 in principal with the original 30 year note to the exact opposite with the better rate and the 15 year mortgage for an extra $500 a month in total payment.
My parents are boomers who bought in the 80’s when mortgage interest rates were at an all time historical high. 16%, that’s crazy. Millennials are full of shite with their victim mentality.
1980’s:
Highest average annual rate*
16.64% (1981)
Lowest average annual rate
10.25% (1989)
https://www.bankrate.com/mortgages/historical-mortgage-rates/
This post was edited on 9/4/26 at 2:37 pm
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