Residential Lending history

In 1893, small state banks started to issue bonds as acknowledgments of debts based on the credit and trust of the debtor alone.

In 1934 the Federal Housing Administration (FHA) was created.

The rise of the United States mortgage market occurred between 1949 and the turn of the 21 st century.

In 1968, the Government National Mortgage Association emerged to bring uniformity to the American mortgage market by bringing financial instruments to keep it afloat.

The birth of the Federal Home Loan Mortgage Corporation occurred in 1970 to help promote home ownership.

Interest rates reached their highest point in modern history in 1981 when the annual average was 16.63%, according to the Freddie Mac data.

Although the Fed’s strategy helped push inflation back to normal levels by the end of 1982, mortgage rates remained mostly in the double-digits for the rest of the decade.

The low-rate environment created a refinancing boom, with rates briefly dropping below 7% for most of 1998 — allowing many owners to refinance multiple times.

The downward trend in mortgage rates stalled out and reversed course with rates jumping back above 8% in 2000.

In 2003, government mortgage institutions accounted for nearly 43 percent of the total mortgage market.

Most recently, the subprime mortgage crisis followed the peak home prices in 2006.

When the markets crashed in 2008, they were triggered by massive mortgage delinquencies and foreclosures as well as a drop in home prices overall.

As a result of this change, mortgage rates fell almost a full percentage point, averaging 5.04% in 2009.

Mortgage rates dropped to a record low of 3.35% in November 2012.

In 2013, rates went up to 3.98%. A big reason for this was that the bond market panicked a little bit when the Federal Reserve said it would stop buying as many bonds.

In 2015, mortgage rates fell back to 3.85% as the market calmed down.

Although they were a little higher to end the year, rates in 2016 averaged 3.65%. With global turmoil, investors flocked to the safety of the United States bond market to guarantee the steadiness of their investments.

When January 2020 came around, the average rate for a 30-year fixed was about 3.7%.

Mortgage rates then hovered within the same range for the first half of 2021.