Are Interest Rates Really Too High to Buy a House? A Look Back in Time
If you’ve been thinking about buying a house lately, you’ve probably heard this more than once: “Interest rates are just too high right now!” It’s a common concern, especially as today’s rates feel steep compared to the rock-bottom numbers we saw not too long ago. But let’s take a step back and put things into perspective.
Hi, I’m Jeff Gooch, your local realtor serving the Lafayette and West Lafayette area. Yes, interest rates have climbed compared to recent years—but perspective is everything. Let’s take a quick journey through history to see where today’s rates really stand.
A Quick Trip Through Mortgage Rate History
Let’s hop in our time machine (or DeLorean, if you prefer) and see how today’s rates stack up against the past:
- Today (2025): FHA and conventional mortgage rates are around 7.26%, with an APR near 6.96%.
- 1973: The year of the first mobile phone call. Interest rates? 8.04%—actually higher than today!
- 1983: The first U.S. woman went to space, and mortgage rates soared to 13.46%. That’s nearly double what we see now.
- 1993: Food Network launched, and rates hovered at 8.07%, about a percent higher than today.
- 2003: Michael Jordan retired, and rates dropped to 5.85%—about a point and a half lower than today.
- 2013: “Selfie” was added to the dictionary, and rates hit a low of 3.34%. Yes, that’s less than half of today’s rates.
Putting Today’s Rates in Perspective
It’s easy to look back at 2013 and wish for those ultra-low rates, but the reality is that today’s rates are much closer to the historical average. In fact, they’re significantly lower than what buyers faced in the 1980s and early 1990s.
Here’s a quick recap:
- 50 years ago (1973): Rates were higher than now.
- 40 years ago (1983): Rates were almost double today’s.
- 30 years ago (1993): Still higher than today.
- 20 years ago (2003): Rates dipped below today’s, but not by much.
- 10 years ago (2013): Rates were exceptionally low, but that was the exception, not the rule.
The Big Picture: More Than Just the Rate
Of course, the math has to work for your personal situation. Interest rates are only one part of the equation—home prices, income, and your long-term plans matter too. If home prices keep rising, waiting for rates to drop could mean paying more later.
A single number shouldn’t be a deal breaker. Yes, 7.25% is higher than 3.34%, but it’s far below the 13.46% buyers faced in the past. And if you talk to those who bought homes even further back, you’ll hear stories of even higher rates.
Ready to Talk About Your Next Move?
If you’re considering buying or selling a home in Tippecanoe County, I’d love to be your real estate resource. Let’s talk about where you are in your real estate journey and see what makes sense for you. Give me a call at 765-413-6190—I’m here to help!
Thanks for reading, and remember: in real estate, perspective is everything!1