Interest Rate History
The economy of today goes hand in hand with mortgage interest rates. Now you can get interest rate as low as 6%
or less.
If the rates suddenly went up in 5% you would be required to pay a lot more per month to get the same loan. The economy looks at this as just a waste of money because if you would be required to pay more money on the same house, you would also earn more money when selling the house. This money would be put to some use in our economy anyway even if you put it into your savings account. In this case the economy wouldn't be any better, what is worse, it would probably slow down.
Fannie Mae instituted in 1938
Before Fannie Mae (Federal National Mortgage Association - FNMA), the mortgage interest rates incredibly varied. Every lender and areas of the country had different. Loans couldn't be sold between different institutions and so on.
In 1938 there wasn't a lot of money around. Therefore the rates were just about 3%. In the '50s to mid' 60s - 5% to 5.5%. In 1971 rates started increasing and then become even unaffordable - 23%. In the the '90s it was again a lot better - from 7% to 9%. Nowadays we have mortage interest rates slightly higher than it was in the '50s but it can be said that these rates are good for the economy and also for us.
If the rates suddenly went up in 5% you would be required to pay a lot more per month to get the same loan. The economy looks at this as just a waste of money because if you would be required to pay more money on the same house, you would also earn more money when selling the house. This money would be put to some use in our economy anyway even if you put it into your savings account. In this case the economy wouldn't be any better, what is worse, it would probably slow down.
Fannie Mae instituted in 1938
Before Fannie Mae (Federal National Mortgage Association - FNMA), the mortgage interest rates incredibly varied. Every lender and areas of the country had different. Loans couldn't be sold between different institutions and so on.
In 1938 there wasn't a lot of money around. Therefore the rates were just about 3%. In the '50s to mid' 60s - 5% to 5.5%. In 1971 rates started increasing and then become even unaffordable - 23%. In the the '90s it was again a lot better - from 7% to 9%. Nowadays we have mortage interest rates slightly higher than it was in the '50s but it can be said that these rates are good for the economy and also for us.
