Mortgage rates have surged in recent years, but in the bigger picture, they’re still relatively low. Homebuyers today might feel squeezed by the average of 6.6% interest rates (as of 2024). Many buyers feel priced out. But if you zoom out just a bit, the story changes. Today’s rates are far from a crisis — in fact, they’re historically affordable.
A Historical Perspective
Take a look at the chart below. In 1981, the average 30-year fixed mortgage rate in the U.S. hit a staggering 18.45%. That’s nearly three times today’s rate. Even through the 1990s and early 2000s, rates hovered between 6% and 10%.
Yes, the average of 6.6% is higher than what we saw during the pandemic boom, but it’s still cheaper than nearly every year before 2009. From 1971 through 2007, mortgage rates averaged over 8%. Buyers in the ’80s were locking in loans at double-digit interest and still managed to build wealth through homeownership.
Why Today’s Rates Are Still a Solid Deal
- Inflation-Adjusted Affordability
Even at today’s rates, they are more affordable in real terms than the double-digit loans of the past. And with wage growth stronger now than in many previous decades, monthly payments are relatively manageable. - Refinancing Is Always an Option
Buyers today can take advantage of a “buy now, refi later” strategy. If rates drop again, refinancing can lower monthly payments — but locking in a home price now avoids overpaying later when the market heats up again. Many buyers sat out during the housing boom, hoping prices or rates would drop. But rates have since climbed, and home prices haven’t fallen enough to make up the difference — meaning those who waited are now facing higher overall costs than if they had bought earlier. - Rent Isn’t Getting Cheaper
For many, buying at 6-7% still beats renting — especially as rents have surged across most markets. A fixed mortgage locks in your cost of living, while rent keeps rising. - Long-Term Wealth Building
Real estate remains a long-term play. If you plan to stay in a home for 5+ years, the current rates won’t derail your investment — especially if you build equity and ride out rate cycles.
Bottom Line
6-7% may not feel cheap, but compared to the 10–18% rates that previous generations paid? It’s still a strong opportunity. Buyers waiting for the abnormal 3% rates from the previous decade to return could be sitting on the sidelines for a long time — and missing the chance to build equity while prices keep rising.
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