It may not seem like it with recent upticks but when compared to yester-year, mortgage rates are historically low. Currently, conforming no-point 30-year fixed mortgage rates are averaging 4.5 percent, 15-year rates are near 4.0 percent and the 5-year ARM is averaging 4.0 percent. These rates are a cakewalk compared to the rates of our fathers and grandfathers.
In the 1980s, the Federal Reserve tried to quell skyrocketing inflation with higher interest rates. It was common for a homebuyer thirty years ago to obtain a mortgage with a double-digit interest rate. In fact, according to a historical study conducted by Trulia, in 1981, mortgage rate averages were as high as 16.6 percent.
Trulia reports that homes are about the most affordable today than they've been at any point in the last 40 years due to income growth and historically low mortgage rates.
Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.