I was on LinkedIn the other day and came across a post featuring a mortgage rate history chart with rates for each year.
It started with 1975, when the 30-year fixed apparently averaged 9.0%, 1980 when it was supposedly 14.4%, and 2015 when it was 4.0%.
For whatever reason they skipped a lot of years in between, I suppose to make the chart more concise.
But what jumped out at me was the fact that mortgage rates were in the 2-3% range in 2012 and 2013 and didn’t make the chart.
It seems a lot of people either don’t know that or don’t remember.
You Could Get a 2-3% Mortgage Rate in 2012 and 2013!
Believe it or not, it wasn’t just 2020 and 2021 when mortgage rates were at their lowest.
Sure, the 30-year fixed technically hit its all-time low in January of 2021, per Freddie Mac data.
And the 15-year fixed hit its record low in July 2021.
But there were some incredibly good years for mortgage rates nearly a decade earlier.
Not only that, but home prices were about 50% off at the time as well!
So if you had purchased real estate in 2012-2013, you likely made out really, really, well.
Anyway, I saw the chart and commented that mortgage rates were also sub-3% in 2012 and 2013.
Most responded to be with doubt or snarky sarcasm, so I took the time to review some old Freddie Mac mortgage rate data.
Didn’t take long to find it. In the Primary Mortgage Market Survey (PMMS), I found that 30-year fixed rates were in the low 3s during 2013.
The lowest was 3.34% in January of 2013. And in 2012, spent nearly the entire second half of the year at 3.50% or lower, as seen above.
In case you’re unaware, Freddie Mac mortgage rates are mere averages and actual rates can be a lot lower (or higher).
But I fondly recall many people snagging rates in the 3s and even sub-3% rates back then.
My Friend Got a 2.75% Mortgage Rate Nearly 15 Years Ago!
A vividly remember a friend of mine got a 2.75% 30-year fixed way back then and a super low purchase price to boot!
If we turn our attention to 15-year fixed mortgages, they were even lower, averaging around 2.625% to 2.75% for a good chunk of the year.
So it wasn’t just pandemic-era mortgage rates that were sub-3%. A full decade earlier home buyers were snagging these low interest rates.
And they made out even better, as noted, because home prices were about 50% lower at the time as the market was still recovering from the early 2000s housing crash.
As for why mortgage rates were that low back then, it was the same story as 2020-2021.
The Federal Reserve was running Quantitative Easing (QE) at that time as well and buying billions in mortgage-backed securities (MBS) to push mortgage rates lower.
Whether they needed to do it again a decade later is a bigger question, as all that easy money led to another big wave of inflation and arguably wasn’t really necessary.
Read on: Try my mortgage rate calculator to quickly compare interest rates an .125% to 0.25% (or more) apart to determine the difference in payment and total interest expense.
(photo: Michael Coghlan)
Before creating this site, I worked as an account executive for a wholesale mortgage lender in Los Angeles. My hands-on experience in the early 2000s inspired me to begin writing about mortgages 20 years ago to help prospective (and existing) home buyers better navigate the home loan process. Follow me on X for hot takes.
