This month I spent some time reviewing housing data going all the way back to the early 1980s because I wanted to see how today's market compares. I wasn't looking for a statistic to quote or trying to predict where the market is headed. I was simply curious and wanted to see if I could find some insight from the past.
Then Freddie Mac published its average 30-year mortgage rate for July 31, 2026.
6.66%.
I have to admit, I laughed. Whether you're superstitious or not, it certainly isn't a number that encourages homeowners with 2.0-3.0% mortgages to rush out and move. Once I stopped laughing, I started thinking.
What happens when millions of homeowners have mortgages in the 2.5% to 3% range, but today's rates are more than double that?
Looking back over four decades of housing data, one thing was clear. Mortgage rates have been much higher than they are today. In fact, they climbed above 18% in the early 1980s—the highest levels homeowners have experienced in modern housing history. As I was digging around in historical housing data, what struck me wasn't the fact that mortgage rates have more than doubled over the past several years. We all know they have. What I was pondering was what those higher rates appear to be doing to homeowner behavior and how that in turn effects buyer and seller behavior.
I believe the historic lower interest rates from the post pandemic days is one of the factors contributing to today's slower housing market. Many homeowners simply aren't eager to trade their historically low mortgage payments for significantly higher ones. We get it. We refinanced during that period, as did many of our friends. Replacing a mortgage in the 2.5% to 3% range with one at 6.66% would be a significant financial decision for which I personally would expect to see some return on my investment: maybe a lower property tax rate (not likely but I can dream), maybe a lower LTV, also not likely because as we know, it is almost impossible to sell at the top and buy at the bottom of the market, unless you are very lucky, which I am not. So what then will it take? Your guess is as good as mine- my crystal ball is broken.
However, I don't think that means people shouldn't move. There are always opportunities in the market. Sometimes they are super easy to find and sometimes not so easy
It just means the questions have changed and we have to adapt.
For some families, moving is still the right decision. Others may discover that remodeling, adding on, using a home equity line of credit, or even keeping their current home as a rental for a period of time may be worth exploring. Every situation is different, and every market presents different opportunities.
Our job isn't to wish for a different market. It's to help clients understand the market we have and provide information for them to make informed decisions within the current market.
That's The Cygnus Perspective.
