Mortgage Rates in 1980

The Fed under Volcker allowed the federal funds rate to spike above 20% in March 1980, triggering an immediate recession. The Fed briefly reversed course mid-year under political pressure, then retightened — creating a unique double-dip policy cycle.

CPI peaked at 14.8% in March — the highest since World War II. The stagflation crisis reached its apex, with both unemployment and inflation simultaneously elevated.

Mortgage rates averaged 13.74% — devastating for housing affordability. Housing starts crashed 40% from the 1979 peak. Many buyers simply could not qualify for mortgages, and ARMs became common.