30 Year Perception

There has been a broad discussion and impact of the dramatic increase in the 30-year mortgage rate. There is no doubt that there will effects from this but the actual current rate might not be “abnormal”.

If you take a step back and look at the 30-year over a longer period, say 20 years, the 6% rate doesn’t seem to be such an aberration.

You can make a strong argument that it was only low because of the support the housing and banking system got from the Fed/Treasury during and after the housing crisis. That the 6% rate is just a slightly lower number than the longer-term rate over this period.

It’s risen dramatically only because it’s reverting off the lows that started with the housing crisis. The issue could be the historical and future behavioral aspects of consumers (both actual borrowers and consumers from refi’s) from their collective short-term memory.