Within the real estate industry, what goes up must go down. The statement has never been truer in relationship to current mortgage rates. The summer of 2010 was marred by a number of newsworthy events including oil leaks, troops returning home and the proclamation of the "lowest mortgage rates in history". For the latter, the statistics came courtesy of Freddie Mac, the government assisted mortgage lender who has been keeping track of mortgage rate data since 1971.
For most individuals the memories of the summer are still fresh and the historically low rates are being taken for granted. However, Mortgage Marvel thinks that taking a look backwards may encourage consumers to take advantage of the historic trend as the cheap loans are not going to be around for ever and may even rise to scary levels not seen for thirty years.
Mortgage Rates, August 2010
August 2010, consumers seeking to secure mortgages had plenty of options for borrowing money on the cheap. During this time period, the Federal Reserve decided not to raise mortgage rates as a way to help stimulate the economy. In America, 70 percent of the entire economy is based on consumer spending and home loans and refinancing accounts for large portions of the activity. Some interesting statistics from the time period include:
- Average Mortgage Rate: 4.43 percent with average points of .7 percent (Freddie Mac)
- Average Retail Price Gasoline: $2.72 per gallon (U.S. Energy Information Administration)
- Average Size of Home: 2,349 square feet (2004, Trulia.com)
- Average Cost of New Home: $198,925 (national average, RealEstateAbc.com)
- National Unemployment Rate: 9.6 percent
- President: Barack Obama
Mortgage Rates, August 1981
The eighties were a very interesting time period in America. Disco was dead and new wave influenced by punk rock was on the top of the music charts. The norm in fashion was big shoulders, fringe, neon brights and acid wash. During the time period there was an economic recession fueled by the 1973 oil crisis, the 1979 energy crisis and overall stagnation in the housing market. The incredibly high mortgage rates were only one factor affecting the recession.
- Average Mortgage Rate: 17.28 percent with average points of 2.1 percent (Freddie Mac)
- Average Retail Price Gasoline: $1.38 per gallon
- Average Size of Home: 1,710 square feet (Throughout decade, Trulia.com)
- Average Cost of New Home: $83,000
- National Unemployment Rate: 7.1 percent
- President: Ronald Reagan
Mortgage Rates, August 1972
When the nineteen-seventies decade began, the country was undergoing massive challenges. The nation went from a "summer of love" to the Vietnam War, watched Watergate unfold, experienced the only resignation of a U.S. president and were affected by a massive energy crisis that resulted in gasoline rationing. Facial hair, polyester and bell-bottoms were the height of fashion. Unemployment was low and while the economy was slow, there was not a recession. Those who had the financial means were able to score amazing deals on properties as well as score fairly decent mortgage rates.
- Average Mortgage Rate: 7.40 percent with average points of .9 percent (Freddie Mac)
- Average Retail Price Gasoline: $.36 per gallon
- Average Size of Home: 1,400 square feet (Throughout decade, Trulia.com)
- Average Cost of New Home: $30,500
- National Unemployment Rate: 5.9 percent
- President: Richard M. Nixon
History will never repeat, meaning chances of scoring a gallon of gas for pennies, luxury homes for under $50k and the ability to borrow money at an interest rate of under 5 percent will not be forthcoming. Consumers should act now in order to score highly discounted properties and borrow cheap money to finance their pursuit of the American Dream.
