Mortgage interest rates in the U.S. Q1 2019- Q2 2023, by mortgage type

In the United States, interest rates for all mortgage types started to increase in 2021. This was due to the Federal Reserve introducing a series of hikes in the federal funds rate to contain the rising inflation. In the second quarter of 2023, the 30-year fixed rate reached 6.49 percent, up from 5.24 percent in the same quarter of 2022.

Why are U.S. home sales decreasing?

Cheaper mortgages normally encourage consumers to buy homes, leading to the number of existing homes sold in the United States declining in 2022. 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 2022, the average rate on a 15-year fixed-rate mortgage in the United States stood between 2.28 and 4.83 percent. Over the same period, a 30-year mortgage term averaged a fixed-rate of between 3.08 and 5.34 percent. Rates on 15-year loan terms are lower to encourage a quicker repayment, which helps to improve a homeowner’s equity.