Former President Trump recently made a false claim regarding mortgage rates, stating that they had skyrocketed to 10% after being at 2% when he left office. However, this claim is inaccurate and lacks important context.
At the beginning of 2021, mortgage rates were indeed at a historic low, with the average interest rate on a 30-year fixed-rate mortgage dropping to 2.65%, as reported by Freddie Mac. This significant drop was influenced by the economic impact of the Covid-19 pandemic, with the Federal Reserve reducing its benchmark federal funds rate to nearly 0% to support the economy.
Contrary to Trump's assertion, current 30-year mortgage rates are not at 10% or anywhere close to that figure. In fact, the average 30-year fixed-rate mortgage reached a high of 7.79% in October 2023, marking a 23-year peak. As of the latest data, the average rate stands at 6.49%, still significantly lower than the claimed 10%.
It is crucial to consider the broader economic context when evaluating mortgage rate fluctuations. While rates have experienced fluctuations over the years, they have not reached the exaggerated levels suggested by the former President. Understanding the factors influencing mortgage rates, such as economic conditions and Federal Reserve policies, provides a more accurate perspective on this important aspect of the housing market.
