If you’re following the residential real estate market, you might be thinking “The sky is falling!!” Afterall, 30-year fixed interest rates on a residential mortgage have gone from 3.5% at the beginning of this year all the way up to around 7%. 

That’s double the interest rate! It feels like everything should be falling apart, so I thought a little historical context would help here.

If you look over the past 50 years of residential real estate mortgages, a little over 7% is the average interest rate. So as jarring as this feels – because our sensibilities have been used to artificially low interest rates for so long – we’re actually at a historically average moment in time, as it relates to financing a home.

As you think about the real estate market, interest rates, and affordability, pause and realize “Okay, this is what a normal, healthy market looks like. It just feels so shocking because of where we’re coming from.”