When Mortgage Interest Rates Return To Normal

One of the more popular phrases we're hearing from home sellers and buyers alike is "when mortgage rates return to normal."One of the more popular phrases we're hearing from home sellers and buyers alike is "when mortgage rates return to normal." Specifically, many tell us they plan to make their next move when normalcy returns to the mortgage market.

But what if the 'normal' we are accustomed to is not the 'normal' that awaits us? A more nuanced picture of 'normal' emerges as we peel back the layers of historical data and present conditions.

Join us as we explore the history of mortgage interest rates, examining the fascinating story of what 'normal' has meant over the years.

Today's Mortgage Interest Rate (22-Year High)

When we plot the weekly survey of Freddie Mac's thirty-year fixed mortgage interest rates, we find a new 22-year high was reached on August 17, 2023, the highest recorded rate since July 2001.

22-year high recorded by Freddie Mac for 30-year mortgage interest rate

This graph reveals that anybody who has purchased a home (with financing) or who has refinanced in the past 22 years has a rate lower than what is available today.

Today's higher rate, viewed through the lens of recency bias, has slowed the housing market by about 1/3rd compared to two years ago.

Annual US Home Sales

This graph plots the total number of home sales each year, with existing home sales plotted in blue and new home sales plotted in red. 2023 is on track to record slightly more home sales than the four worst post-housing-bubble years from 2008 through 2011.

Graph of new and existing home sales since 1989

The shock of mortgage interest rates more than doubling from September 2021 to September 2022 shocked the market into a slowdown. Never before have we seen rates double so quickly.

The rapid rate ascent has trapped people in homes with low-interest rate loans. If they decide to move, rates are often double what they paid for their last home, and home prices are higher too. It's a double-whammy on home affordability that will take some time to clear the market. Unless low mortgage interest rates return.

Can Builders Save The Housing Market?
Home Affordability Crisis: Local Solutions ~ National Issue: Delving deep into current US homebuilder production. Enough? Short? A less optimistic real estate market outlook.
The Unaffordable Housing Paradox: Why Homes Are Out of Reach
The affordable housing shortage has this solution. It requires changes in urban planning that pay attention to housing costs and housing economics.
Are Home Prices Heading for a Crash?
The US housing market has been a frequent topic in the news, but a crucial factor is being ignored when determining the direction of US home prices.
The Fallacy of Affordable Housing: The Need for More Homes
The idea of affordable housing is noble, but the reality is that building new low-end homes is not the solution to the housing crisis we're facing.
Foreclosure Crisis: What the Data Tells Us
Are you curious about what's really going on with foreclosures and loans in forbearance? Worried about the next housing crash?
Are you a NIMBY or a YIMBY?
Two terms have gained prominence over the past few years. NIMBY (Not In My Back Yard) and YIMBY (Yes, In My Back Yard) are labels that classify housing market activists into one of two camps
How Often Do Home Prices Fall?
Are home prices falling? Will house prices fall soon? Home prices are soaring, buyers are having to pay above most sellers' asking prices, and the housing market feels just like a feeding frenzy during Shark Week on the Discovery Channel.
Home Affordability Falls To 40-Year Low!
It's been over forty years since homes were more expensive than today when you factor in inflation, home prices, and mortgage interest rates.
The Surprising Way Interest Rates Move The Market
When mortgage interest rates change, housing market experts surface and make bold claims on how the market will unfold. They are usually wrong!
Real Story Behind Home Prices: Fact Versus Fiction
When it comes to buying a home, many misconceptions about the housing market can cause confusion and uncertainty for potential homebuyers. One of the most persistent myths is that home prices fall frequently, but is this true?
Biden Rent Control Plan
The White House announced an executive action that Biden says is designed to "protect renters and promote rental affordability," but I cannot imagine a worse response from our Commander In Chief to confront the nation's housing and rental affordability crisis
Big Redfin Report: First Time Redfin Saw THIS Since 2012!
Recent housing market data from Redfin, the large online real estate portal, shows that something occurred over the past two months that has not happened in the past ten years.
Will Assumable Mortgages Save Housing?
Will assumable mortgages save housing? Home affordability is becoming one of the hottest topics in the economy, but I was recently asked if assumable mortgages might bring some relief to homebuyers. This video shares what I think about how mortgage assumption will impact housing.
Why Vacancy Rates Are the Hidden Indicator of Housing Market Health
Imagine shopping for a new home—whether you're aiming to buy or rent—and finding that every other house on the block is empty. Conversely, imagine a tight market where you can't even find a rental property, let alone purchase a home.
Renter Nation Says Goodbye To The American Dream!
It's the beginning of a generational shift in the housing market that will greatly reduce homeownership and push the US towards becoming a renter nation, one in which Wall Street is in control of both home prices and rents
The Truth About Foreclosures - Mortgage Pipeline Update
The best way to start to analyze the potential for mass foreclosures is to break down the current mortgage pipeline to observe forming trends.
Will NINJA Loans Bring Down The Housing Market?
Housing Crash Coming? If you remember back to the housing bubble, we saw the growth of "NINJA" loans, as they were a segment of the home sales explosion.
Google Knows. The Surprising Real Estate Market Forecast You Won't Believe!
Is it possible to forecast home sales in the US housing market with a search on Google? I had this thought about Google and a google housing market forecast as I was reexamining our search engine optimization efforts.
Economic Outlook For The Housing Market
Joe Manausa gives an update on the economic outlook for Tallahassee and the US housing market. Includes housing market forecast, housing market activity, and new construction analysis, and reveals how Tallahassee compares with the overall US housing market.
Will New Construction Bottleneck Cause A New Housing Bubble?
Are you concerned that the bottleneck of builder homes under construction will cause a new housing bubble as they are finally completed?
6 Housing Market Rumors Debunked (1 Confirmed)
7 different housing market rumors are perpetuated as “FACT” in various forms of "hype." Discussion of this "housing market news" has been ongoing for years, so today, I want to put them all to rest.
Who To Blame For Soaring Home Prices
There is a huge shortage of homes in the US, and there is only one culprit to blame, and I’m going to tell you who it is!
What You Don't Know About Home Prices!
Home prices are gaining traction as topics in both the mainstream media and social media, but there are three common misconceptions about the change in house prices that are unanimously reported as unquestionably true.
Is The Supply Of Homes For Sale Finally Rising?
Is The Supply Of Homes For Sale Finally Rising? Is the US housing market heading for a crash? Will home prices fall? Follow the metrics that clearly show what to expect from home prices and the supply of homes for sale in 2022 and beyond.
Zillow Exposes Mainstream Media On Home Prices
Zillow serves up the data that exposes the poor reporting of the mainstream media on Zillow home prices and that conditions are not what they seem.
House Prices - Inflation Adjusted Home Prices
Just How High Are Today's House Prices? The price of houses in the US has risen to a toxic level, and many are wondering how they will be able to afford to live in their local communities
Podcast: Housing Myths Dispelled
Home Building Hero David Belman and Joe Manausa discuss many of the "myths" that have been published in the media about the housing market.
USA Today Misleads Readers About Home Prices
USA Today Misleads Readers About Home Prices - Median Home Price: The USA Today Network has been misleading readers, using the median home price change suggesting that houses are getting cheaper and a real estate crash is upon us. Is this poor journalism or is there something more to it?
Are We Overbuilding Again?
I've been asked recently for my opinion on the number of homes being built in the US. Specifically, people are wondering if the ghost of 2006 has come back to bring more homes to the market than what can be consumed?
Housing - Do You Follow Your Gut (Or Analytics) In Housing?
I think the signs in the housing market are loud and clear, yet most real estate reports I read or view are missing the most critical factor in housing today.
Home Ownership Is Radically Different For Millennials
This is a simple millennial housing case study that will clearly show that the millennials will face a housing market like no other generation going back to post-World War II.
When Will Home Prices Fall?
Are Home Values About To Crash AGAIN? Now that we've seen about three years' worth of skyrocketing home prices, prudent buyers with memories are asking when home prices are going to start falling again.

Today's Mortgage Interest Rates (8% Lower Than Average)

When we take a broader view of past mortgage interest rates, we find that today's rate is 8.4% lower than the 52-year average.

Graph shows 52 years of mortgage rate history

Average mortgage interest rates each decade for the past 52 yearsDid you catch that? Today's rates are "lower than normal!" When we look back on the history of mortgage interest rates in the US, it's obvious that the past twenty years have been awesome!

From the 1970s through the 1990s, it was common for some homeowners to have double-digit mortgage interest rates on their homes. But since 2000, we look at 6% as a shockingly high rate to pay for borrowed funds.

Waiting (Hoping) This Time Is Different?

In the quest to determine the future direction of interest rates, one encounters a broad spectrum of opinions, ranging from the highly optimistic to the decidedly pessimistic.

A common assertion is that interest rates are cyclical, following patterns that can be discerned through careful observation. But how does one decode these cycles amidst the noise of economic data?

Conversely, a growing sentiment among some analysts and economists posits that today’s landscape is unique. According to this perspective, efforts will be made to maintain mortgage interest rates at historically low levels, raising them primarily as a tool to combat inflation when necessary.

The advocates for this new paradigm often argue that "this time it's different." They cite factors such as political hesitancy or the capabilities of modern computing—which allows for rapid, sophisticated analysis of economic conditions and thereby enables timely interventions to curb inflation—as evidence for their stance.

However, disciples of the "this time it's different" mantra would be wise to consult history. Substantial evidence suggests that each era's 'new normal' is often not as unprecedented as it may seem.

For those interested in a deep and informed perspective on the long-term trends in interest rates, consider adding "This Time Is Different: Eight Centuries Of Financial Folly" to your reading list. This book, which analyzes interest rates across a span of more than 800 years, offers invaluable insights into the historical context of today's rates.

Joe Manausa real estate quotes  Throughout history, rich and poor countries alike have been lending, borrowing, crashing--and recovering--their way through an extraordinary range of financial crises. Each time, the experts have chimed, "this time is different"--claiming that the old rules of valuation no longer apply and that the new situation bears little similarity to past disasters. With this breakthrough study, leading economists Carmen Reinhart and Kenneth Rogoff definitively prove them wrong.
[This Time Is Different: Eight Centuries Of Financial Folly]

Don't be so quick to assume that rates will come back down!

Marry The Home ... Date The Rate

The saying "Marry the home, date the rate" is a metaphorical way of advising homebuyers to think long-term about the property they are choosing to buy (i.e., they should love the home and be committed to living in it for a significant period of time, like a marriage), but to understand that mortgage rates can and do fluctuate over time, and can be refinanced as they change (like dating, which can be more casual and temporary).

The "marry the home" part of the saying emphasizes that choosing a home should be a thoughtful and committed decision. You should love the home you're buying and plan to be there for a substantial period of time, so you should choose wisely.

The "date the rate" part of the saying suggests that you shouldn't get too attached to your mortgage rate because mortgage rates can be refinanced when they change. Just like you might date different people until you find the right one, you can—and should—shop around for mortgage rates and be open to changing (refinancing) if a better rate becomes available.

It’s a way of reminding people to focus on finding a home they will be happy with in the long term while staying flexible and savvy with the financing since interest rates can fluctuate and there may be opportunities to refinance at a lower rate.

Home prices generally rise, so waiting for rates to fall amounts to a higher home price when you purchase. If rates never fall, do you stay where you are? Do you rent?

History warns us that rates will go back higher; these past twenty-plus years have been a blessing that even the youngest amongst us might never see again during their lifetimes. Find a home you can afford that will serve your needs now and well into the future, and secure it before the home affordability crisis makes doing so impossible.

How Can We Help You?


Describe the Home You're Looking For
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
What 'normal' has meant over the years - Understand where rates are going
Watch through the end and you'll understand when mortgage interest rates return to normal.
Foreclosure Crisis: What the Data Tells Us
Are you curious about what's really going on with foreclosures and loans in forbearance? Worried about the next housing crash?
Big Redfin Report: First Time Redfin Saw THIS Since 2012!
Recent housing market data from Redfin, the large online real estate portal, shows that something occurred over the past two months that has not happened in the past ten years.
Are Home Prices Heading for a Crash?
The US housing market has been a frequent topic in the news, but a crucial factor is being ignored when determining the direction of US home prices.
How Bad Is It? SHOCKING Building Permits Report!
The lack of home affordability has become a widely discussed issue in the media - the shortfall in new single-family home permits and multi-family property permits and construction exacerbates the current housing crisis.
Will New Construction Bottleneck Cause A New Housing Bubble?
Are you concerned that the bottleneck of builder homes under construction will cause a new housing bubble as they are finally completed?
The Unaffordable Housing Paradox: Why Homes Are Out of Reach
The affordable housing shortage has this solution. It requires changes in urban planning that pay attention to housing costs and housing economics.
Google Knows. The Surprising Real Estate Market Forecast You Won't Believe!
Is it possible to forecast home sales in the US housing market with a search on Google? I had this thought about Google and a google housing market forecast as I was reexamining our search engine optimization efforts.
The Truth About Foreclosures - Mortgage Pipeline Update
The best way to start to analyze the potential for mass foreclosures is to break down the current mortgage pipeline to observe forming trends.
Zillow Housing Market Update
Zillow data unveils the great twists & turns shaping US housing trends, shedding light on the challenges and opportunities ahead.
Zillow Drops Bombshell Real Estate Update
You won't want to miss the latest data release from Zillow. They've just dropped a bombshell of a report that will significantly impact the housing market.
Renter Nation Says Goodbye To The American Dream!
It's the beginning of a generational shift in the housing market that will greatly reduce homeownership and push the US towards becoming a renter nation, one in which Wall Street is in control of both home prices and rents
The Surprising Way Interest Rates Move The Market
When mortgage interest rates change, housing market experts surface and make bold claims on how the market will unfold. They are usually wrong!
Home Affordability Falls To 40-Year Low!
It's been over forty years since homes were more expensive than today when you factor in inflation, home prices, and mortgage interest rates.
Biden Rent Control Plan
The White House announced an executive action that Biden says is designed to "protect renters and promote rental affordability," but I cannot imagine a worse response from our Commander In Chief to confront the nation's housing and rental affordability crisis
Market Equilibrium, How The Balance Has Changed In Real Estate
The way we estimate housing market equilibrium has changed, and with it, the way the market is evaluated must change.
What You Don't Know About Home Prices!
Home prices are gaining traction as topics in both the mainstream media and social media, but there are three common misconceptions about the change in house prices that are unanimously reported as unquestionably true.
New Home Construction Report
Kevin Erdmann Housing Update September 2022 - Explains the new home construction pipeline and what to know about the number of homes being built in the US.
Unlocking Zillow's Latest Housing Trends And Forecasts
Zillow has shared its extensive data that we have used to generate our monthly housing market update. Zillow reports this right now:
Zillow Exclusive: 5 Charts on the US Housing Market You Can't Miss!
Zillow has just released new data that provides valuable insights into the changes taking place in the real estate industry.
Why Vacancy Rates Are the Hidden Indicator of Housing Market Health
Imagine shopping for a new home—whether you're aiming to buy or rent—and finding that every other house on the block is empty. Conversely, imagine a tight market where you can't even find a rental property, let alone purchase a home.
House Prices - Inflation Adjusted Home Prices
Just How High Are Today's House Prices? The price of houses in the US has risen to a toxic level, and many are wondering how they will be able to afford to live in their local communities
USA Today Misleads Readers About Home Prices
USA Today Misleads Readers About Home Prices - Median Home Price: The USA Today Network has been misleading readers, using the median home price change suggesting that houses are getting cheaper and a real estate crash is upon us. Is this poor journalism or is there something more to it?
Economic Outlook For The Housing Market
Joe Manausa gives an update on the economic outlook for Tallahassee and the US housing market. Includes housing market forecast, housing market activity, and new construction analysis, and reveals how Tallahassee compares with the overall US housing market.
Podcast: Housing Myths Dispelled
Home Building Hero David Belman and Joe Manausa discuss many of the "myths" that have been published in the media about the housing market.
Are Wages Keeping Up With Rising Home Prices
Home prices are rising. Mortgage interest rates are rising. Are people earning enough money to buy homes today, or is the home affordability crisis getting worse?
Zillow Housing Market Update
In this must-watch video, we delve into the roller coaster ride that is the real estate market. Discover the latest insights and trends from Zillow.
Zillow - Surprising Home Sales Report
Zillow has something to say about the housing market. Zillow's data suggests something else is happening. And it’s not just Zillow.
Zillow Exposes Mainstream Media On Home Prices
Zillow serves up the data that exposes the poor reporting of the mainstream media on Zillow home prices and that conditions are not what they seem.
Housing - Do You Follow Your Gut (Or Analytics) In Housing?
I think the signs in the housing market are loud and clear, yet most real estate reports I read or view are missing the most critical factor in housing today.
6 Housing Market Rumors Debunked (1 Confirmed)
7 different housing market rumors are perpetuated as “FACT” in various forms of "hype." Discussion of this "housing market news" has been ongoing for years, so today, I want to put them all to rest.
Is The Supply Of Homes For Sale Finally Rising?
Is The Supply Of Homes For Sale Finally Rising? Is the US housing market heading for a crash? Will home prices fall? Follow the metrics that clearly show what to expect from home prices and the supply of homes for sale in 2022 and beyond.
Who To Blame For Soaring Home Prices
There is a huge shortage of homes in the US, and there is only one culprit to blame, and I’m going to tell you who it is!
When Will Home Prices Fall?
Are Home Values About To Crash AGAIN? Now that we've seen about three years' worth of skyrocketing home prices, prudent buyers with memories are asking when home prices are going to start falling again.
Home Ownership Is Radically Different For Millennials
This is a simple millennial housing case study that will clearly show that the millennials will face a housing market like no other generation going back to post-World War II.
Are We Overbuilding Again?
I've been asked recently for my opinion on the number of homes being built in the US. Specifically, people are wondering if the ghost of 2006 has come back to bring more homes to the market than what can be consumed?
Building Permits Reveal Major Housing Crisis
How do we know there is a major housing crisis brewing? Look no further than building permits! This video examines building permits in detail, as the issue of home affordability is going to become one of the most prominent topics for many years in the national media.
REDFIN Reports Falling Home Prices?
Does the latest Redfin real estate report show home prices falling? I reviewed the Redfin real estate data, but did I find home prices dropping?
Can Builders Save The Housing Market?
Home Affordability Crisis: Local Solutions ~ National Issue: Delving deep into current US homebuilder production. Enough? Short? A less optimistic real estate market outlook.

There are a lot of people who endorse Joe for the job of selling your home, from Barbara Corcoran (Star of ABC's Shark Tank) to Preston Scott (host of Tallahassee's top daily "Audio Magazine," as well as the thousands of happy customers Joe has helped in the past. Listen why!

Post a Comment

(850) 378-5727