That may come as a surprise to anyone who’s been house hunting lately. Indeed, First American’s Real House Price Index rose 30.6% between February 2021 and February 2022, its fastest year-over-year rate in data going back more than 30 years. And mortgage rates have spiked since February, when the index was calculated using a 30-year fixed-mortgage rate of 3.8%. The average 30-year fixed mortgage rate rose to 5.11% this week, according to Freddie Mac—the highest it’s been since 2010. But perspective is important. The historical average rate for a 30-year mortgage was 7.78% in data going back to 1971, and it’s gotten as high as 18.63% in 1981. In other words, the record low rate of 2.65% hit in January 2021 was an oddity never meant to last. “The last two years were the exception, not the rule,” Marc Fleming, chief economist at First American, pointed out in a blog post. “The housing market is adjusting to a not-so-new normal.” Have a question, comment, or story to share? You can reach Diccon at dhyatt@thebalance.com. Want to read more content like this? Sign up for The Balance’s newsletter for daily insights, analysis, and financial tips, all delivered straight to your inbox every morning!
