I was on LinkedIn the other day and came across a post with a chart of mortgage rate history and rates for each year.
It started in 1975, when the 30-year fixed rate apparently reached 9.0%, in 1980 when it was said to be 14.4%, and in 2015 when it was 4.0%.
For whatever reason they skipped so many years in between, I think I made the chart too short.
But what became clear to me was that loan rates were in the 2-3% range in 2012 and 2013 and they didn’t make the chart.
It seems most people don’t know that or don’t remember.
You Can Get a 2-3% Home Loan Rate in 2012 and 2013!
Believe it or not, it wasn’t just 2020 and 2021 when mortgage rates were so low.
Indeed, the 30-year fixed rate fell sharply in January of 2021, according to Freddie Mac data.
And the 15-year flat rate reached its record low in July 2021.
But there were some very good years for mortgage rates about ten years ago.
Not only that, but home prices were almost 50% off at the time!
So if you bought real estate in 2012-2013, you probably did really, really, really well.
Anyway, I saw the chart and noticed that mortgage rates were also below 3% in 2012 and 2013.
Most responded with skepticism or sarcastic sarcasm, so I took the time to review old Freddie Mac’s mortgage rate data.
It didn’t take long to find it. In the Primary Mortgage Market Survey (PMMS), I found that 30-year fixed rates were in the low 3s in 2013.
The lowest was 3.34% in January 2013. And in 2012, they spent almost the second half of the year at 3.50% or less, as shown above.
In case you don’t know, Freddie Mac loan rates are just estimates and actual rates can be much lower (or higher).
But I clearly remember a lot of people riding rates in the 3s and rates below 3% at that time.
My Friend Got A 2.75% Mortgage Rate Almost 15 Years Ago!
I remember well that a friend of mine got 2.75% for 30 years at that time and the lowest purchase price!
Turning our attention to 15-year fixed-rate bonds, they were much lower, averaging 2.625% to 2.75% for a good chunk of the year.
So it wasn’t just that mortgage rates during the pandemic were below 3%. For the past full decade home buyers have been riding these low interest rates.
And they did even better, as noted, because home prices were about 50% lower at the time as the market was still recovering from the early 2000s housing crash.
As for why mortgage rates were low then, it was the same story as in 2020-2021.
The Federal Reserve was implementing Quantitative Easing (QE) at the time and buying billions of mortgage-backed securities (MBS) to lower lending rates.
Whether they needed to do it again ten years later is a big question, as all that easy money led to another big wave of inflation and arguably wasn’t really needed.
Read on: Try my mortgage rate calculator to quickly compare interest rates that differ by .125% to 0.25% (or more) to determine the difference in payment and total interest expense.
(Photo: Michael Coghlan)
Before creating this site, I worked as an account manager for a real estate broker in Los Angeles. My experiences in the early 2000s inspired me to start writing about mortgages 20 years ago to help prospective (and current) home buyers better navigate the mortgage process. Follow me on X for the hottest.
