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Home-Loan Rates Exceed 6%—Highest Level Since Late 2008

If you planned to buy a home this year and were waiting for mortgage rates to move lower, slap your forehead and admit it. You totally missed out on winning the mortgage game in 2022.

On September 15th, Freddie Mac’s Primary Mortgage Market Survey reported that benchmark 30-year fixed home loan rates rose to an average of 6.02% nationwide, up from 5.89% a week earlier. It is the first time since late 2008 that rates surpassed 6%. A year ago, 30-year fixed loans averaged only 2.86%.

Interest charges on home loans have doubled over the past nine months because the Federal Reserve Board shifted from a relaxed monetary policy that has supported the economic rebound from the 2020 pandemic recession toward a tighter policy.

“Young home buyers are in shock because interest rates are moving upward so fast,” said Jeremy Rose, mortgage broker for Guaranteed Rate in Chicago. “Buyers ask if they should wait for rates to come down. The reality is rates likely will inch higher for the rest of the year and into 2023.”

A borrower who places a 20% down payment and takes out a 30-year fixed rate loan of $300,000 at 6% interest this week would make a monthly principal and interest payment of $1,799, Rose said.

“The payment would have been only $1,265—nearly 30% less—in early January of 2022, when benchmark 30-year fixed mortgage rates were around 3%, he said.

Home-loan rates have steadily increased since December 15, 2021, when the Fed launched its new policy. With several increases this year the federal-funds target rate has risen from 1.66% in January to the current range of 2.25% to 2.5% in 2022. Another 100-basis point increase is expected at the Fed’s next meeting on September 21st.

This new hike likely will push the 10-year Treasury rate—the gauge economists use to forecast 30-year-fixed mortgage interest charges—to a range of 3.25% to 3.5%.

Like most banks, the Fed is not your friend. The Fed wants to cut inflation and really doesn’t care if your mortgage payment shoots up 30%.

The Freddie Mac survey is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20% down and have excellent credit.

“Mortgage rates continued to rise alongside hotter-than-expected inflation numbers,” said Sam Khater, Freddie Mac’s chief economist. “Although the increase in rates will continue to dampen demand and put downward pressure on home prices, inventory remains inadequate.”

Freddie Mac also reported that 15-year fixed mortgages averaged 5.21% on September 15th up from 5.16% a week earlier. A year ago, the 15-year fixed loans averaged 2.12%.

Mortgage-rate history

Thirty-year fixed-mortgage interest rates ended 2020 at a rock-bottom 2.65%—the lowest level in the Freddie Mac survey history, which began in 1971. Home-loan rates set new record lows an amazing 16 times in 2020, and tens of thousands of homeowners refinanced.

Archives of the now-defunct Federal Housing Finance Board show long-term mortgage rates in the 1960s were not much higher than the Great Depression, when lenders were charging 5% on five-year balloon loans.

Nearly six decades ago, between 1963 and 1965 you could get a mortgage at 5.81% to 5.94%. Between 1971 and 1977, the now-defunct Illinois Usury Law held rates in the 7.6%-to-9% range.

In the early 1980s, run-away inflation caused home-loan rates to skyrocket into the stratosphere. According to Freddie Mac, benchmark 30-year mortgage rates peaked at a jaw-dropping 18.45% in October of 1981 during that Great Recession.

Rates finally fell below 10% in April of 1986, and then bounced in the 9%-to-10% range during the balance of the 1980s. Twenty-three years ago—in August of 1999—when some of today’s Millennial borrowers were still in diapers, lenders were quoting 8.15%.

For more housing news, visit Don DeBat is co-author of “Escaping Condo Jail,” the ultimate survival guide for condominium living. Visit


“The book is Escaping Condo Jail by Sara Benson and Don DeBat. I would say that anybody thinking about buying a condo, or even anybody serving on a condo board, or anybody who has any connection to a condo, this is must reading—all 600 and something pages. Thanks a lot for a great book!”


Steve Sanders, “Your Money Matters” WGN TV, December 22, 2014

By Don DeBat

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