The "New Normal" Mortgage Rate Range

In early June, I wrote: Could 6% to 7% 30-Year Mortgage Rates be the "New Normal"? This is an update to that post with some additional research.

In the previous post I noted that a key pitch, by real estate agents for home buyers right now, is that they will likely be able to refinance at a lower mortgage rate in a few years. The argument is that once the Federal Reserve has inflation back down to the 2% target, 30-mortgage rates will decline, perhaps to around 5% or lower. Of course, no one expects to see 3% mortgage rates without another crisis.

This graph is from Mortgage News Daily and shows the 30-year mortgage rate since 2010. Rates were mostly in the 3.5% to 5% range for over a decade prior to the pandemic. Currently rates are at 7.26% for 30-year mortgage rates.