How Do Today’s Interest Rates Compare Historically?

Mortgage rates have been a hot topic lately—and for good reason. After years of record lows, rates have climbed significantly in recent times. But how do today’s numbers actually stack up against historical trends? The answer might surprise you.

In 2020 and 2021, mortgage rates dropped to all-time lows, hovering around 2.5% to 3% for a 30-year fixed loan. These were truly unprecedented numbers, driven by the economic uncertainty of the pandemic and aggressive action by the Federal Reserve. Buyers locked in incredibly low payments, and refinancing boomed.

Today’s rates, averaging around 6.5% to 7% for a 30-year fixed mortgage in mid-2025, feel high by comparison—but zoom out, and they’re still well below historical peaks. In the 1980s, for example, mortgage rates soared above 18%. Throughout the 1990s and early 2000s, rates mostly floated between 6% and 8%, which many economists considered normal for that time.

So while today’s rates may seem steep coming off a historic low, they’re not out of line with longer-term averages. In fact, buyers and sellers adjusting to this “new normal” are working within a more typical market—one where rates reflect inflation, economic conditions, and housing demand more accurately.

For buyers, the key is to focus on long-term affordability, not just rate headlines. And for sellers, understanding that today’s buyers are recalibrating expectations can help in setting realistic prices and terms.

In short, mortgage rates today may feel high in the short term, but they’re far from historically extreme. They’re closer to where rates have typically lived before the pandemic disrupted the market. With smart planning and the right strategy, homeownership is still very much within reach.

For more information, and to find a professional real estate agent to help you understand interest rates and their effect on your home search or sale, visit AddressNIllinois.com. This online resource connects you with experienced real estate professionals who can guide you through the entire process.