Loading CalcVerseAI...
Rates begin falling from record peak as recession deepens
16.04%
Annual avg rate
30-yr fixed
-0.59pp
vs 1981
Year-over-year
12.26%
Fed funds rate
Annual avg
+6.13%
CPI inflation
Year-over-year
Estimated monthly rates based on annual averages and adjacent-year interpolation. Seasonal pattern reflects typical mortgage market spring/summer premium.
With inflation clearly declining, the Fed under Volcker began gradual easing. The fed funds rate fell from 14% in January to under 9% by December, the fastest sustained decline in Fed history. The Garn-St. Germain Act deregulated savings institutions.
CPI fell sharply to 6.1%, confirming that Volcker's painful medicine was working. Falling oil prices aided the disinflation. The economy remained in deep recession through most of the year.
Mortgage rates fell from over 17% in January to around 13.5% by December — still historically high, but the declining trend revived housing activity in late 1982. Housing starts began recovering.
$4,044/mo
At 1982 rate (16.04%)
Principal + interest only
$1,964/mo
At current rate (6.84%)
Principal + interest only
$2,080/mo
1982 was more expensive
vs today on same loan