Quarterly mortgage interest rates in the U.S. 2019, by mortgage type

In the United States, interest rates for all mortgage types decreased between the fourth quarter of 2018 and the first quarter of 2019. The rates, which are affected by the federal funds rate, are lowered in an attempt to boost home sales and support the American economy.

Why are U.S. home sales falling?

Cheaper mortgages normally encourage consumers to buy homes, but the number of existing homes sold in the United States has stalled since 2017. One reason for this is that the housing market has become increasingly unaffordable. Since 2011, the median price of an existing single-family home in the United States has increased by around 50 percent. Over the same period, median weekly earnings have increased by just 17 percent.

Comparing mortgage terms and rates

Between 2008 and 2018, the average rate on a 15-year fixed-rate mortgage in the United States was 3.68 percent. Over the same period, a 30-year mortgage term averaged a fixed-rate of 4.37 percent – coincidentally, this was the same rate set on a 30-year fixed-rate mortgage in the first quarter of 2019. Rates on 15-year loan terms are lower to encourage a quicker repayment, which helps to improve a homeowner’s equity.