Blog Post

While history shows you can’t predict how much interest rates will change in the short term, it does indicates that they will fluctuate over time. Interest rates increase and decrease based on a variety of economic factors and, while they have increased in recent years, they are still lower than they have been in the past.

In 2022, mortgage interest rates peaked at just over 7% for a short time, which is still lower than the historical average of 7.75 percent (from 1971–2023), according to the Freddie Mac Primary Mortgage Market Survey®. Over the course of that 40+ years of historical data, interest rates have ranged between 18.53% and 2.67%.

Keep in mind that while interest rates will rise and fall, home prices will typically trend upward. Over that same period (from 1971-2023), the average sale price of houses has increased by over 1,500%, according to the Federal Reserve Bank of St. Louis.

And waiting to buy a home until interest rates go down can actually end up costing you more money than buying now because escalating home prices. For example, a $500,000 loan with a 6% interest rate will cost about $80,000 less over the life of the loan than a $600,000 loan at a 5% interest rate.

Add to that the potential to refinance your $500,000 loan if interest rates dip, and you can see how the savings can compound.