U.S. 30-Year Mortgage Rate History

Freddie Mac began the Primary Mortgage Market Survey on April 2, 1971, capturing the average rate offered to prime borrowers each week. The first full-year annual average in 1972 was 7.38%. Through the 1970s the rate climbed steadily as inflation accelerated, reaching 11.20% by 1979. Two oil shocks (1973-1974 and 1979) and deteriorating inflation expectations drove the rise, but the structural break came when Paul Volcker was named Fed Chair in August 1979.

The annual average for 1981 was 16.63%, the highest in the PMMS series. Weekly readings exceeded 18% in October 1981. Volcker held the federal funds rate near 19-20% to break inflation expectations, and mortgage rates followed. The 1981 peak corresponds to a roughly 6.5% inflation rate (down from 13.5% in 1980), so real mortgage rates were extraordinarily high. Home sales collapsed: existing-home sales in 1981 were down nearly 50% from the 1978 peak.

Once inflation broke (CPI fell from 13.5% in 1980 to 3.2% in 1983), mortgage rates declined steadily. The annual average fell from 16.04% in 1982 to 10.34% by 1988. The Tax Reform Act of 1986 preserved the mortgage interest deduction (while killing most other interest deductions), which contributed to housing demand throughout the late 1980s.

A roughly 25-year trend of declining mortgage rates began in 1990 (10.13%) and didn't bottom until 2012-2013. Major waypoints: 7.93% in 1995 (post-Greenspan rate cuts), 8.05% in 2000 (dot-com peak), and 5.83% in 2003 (the first sub-6% reading in the modern era). Each post-recession cycle established a lower trough than the last, a pattern that held until 2022.

In response to the 2008 financial crisis, the Fed cut the federal funds rate to zero and began the first round of quantitative easing in November 2008, including direct purchases of mortgage-backed securities. The annual average dropped from 6.03% in 2008 to 5.04% in 2009 and continued falling. Home prices nationally fell roughly 27% from the 2006 peak through 2012 (Case-Shiller).

The Fed's emergency response to COVID-19 (zero policy rate, expanded QE including direct MBS purchases) drove mortgage rates to 2.96% annual average in 2021, the lowest in the PMMS series. Weekly readings touched 2.65% in early January 2021. Existing homeowners refinanced at unprecedented rates: roughly 14 million refinances happened in 2020-2021 (Black Knight). The "lock-in effect" from these ultra-low rates is the dominant feature of the 2024-2026 housing market.

The Fed began aggressive policy-rate increases in March 2022 to fight 9% CPI inflation. The annual average mortgage rate jumped from 2.96% in 2021 to 5.34% in 2022 and 6.81% in 2023 - the largest one-year and two-year moves since the 1979-1980 spike. The 2024-2026 averages have stabilized in the 6.7% to 6.8% range. As of March 2026, the PMMS reading is approximately 6.75% (the 2026 figure on the chart).