What was the average 30-year mortgage rate in 1989?

The average 30-year fixed mortgage rate in 1989 was 10.32%, according to Freddie Mac's Primary Mortgage Market Survey (PMMS). This was 0.02 percentage points lower than the 10.34% average in 1988.

How much was a mortgage payment in 1989?

At the 1989 average rate of 10.32%, the monthly principal and interest payment on a $300,000 30-year fixed mortgage would have been approximately $2,704. At today's average rate of 6.84%, the same mortgage costs $1,964/month.

What caused mortgage rates in 1989?

The Federal Reserve maintained a federal funds rate averaging 9.21% during 1989. The Fed maintained a restrictive monetary policy stance. Consumer price inflation was 4.83% in 1989. Inflation was within or near the Federal Reserve's long-run target range.

← 1988 (10.34%)1990 (10.13%) →

📊 Historical Mortgage Data · Source: Freddie Mac PMMS

Mortgage Rates in 1989

30-year fixed averaged 10.32% — falling rates

10.32%

Annual avg rate

30-yr fixed

-0.02pp

vs 1988

Year-over-year

9.21%

Fed funds rate

Annual avg

+4.83%

CPI inflation

Year-over-year

Estimated Monthly Rate Trend — 1989

Estimated monthly rates based on annual averages and adjacent-year interpolation. Seasonal pattern reflects typical mortgage market spring/summer premium.

Low: 10.12%High: 10.41%Avg: 10.32%

1989 in Context — Surrounding Years

Year	30-Yr Rate	Fed Funds	Inflation
1985	12.43%	8.10%	+3.56%
1986	10.19%	6.80%	+1.86%
1987	10.21%	6.66%	+3.66%
1988	10.34%	7.57%	+4.08%
▶ 1989	10.32%	9.21%	+4.83%
1990	10.13%	8.10%	+5.39%
1991	9.25%	5.69%	+4.25%
1992	8.39%	3.52%	+3.02%
1993	7.31%	3.02%	+2.96%

Economic Context in 1989

🏦

Federal Reserve Policy

The Federal Reserve maintained a federal funds rate averaging 9.21% during 1989. The Fed maintained a restrictive monetary policy stance.

📈

Inflation Environment

Consumer price inflation was 4.83% in 1989. Inflation was within or near the Federal Reserve's long-run target range.

🏠

Housing Market Impact

With elevated mortgage rates averaging 10.32%, housing affordability was tight by modern standards. Declining rates spurred refinancing activity and supported home purchases.

What Did a 1989 Mortgage Cost? ($300,000 Loan · 30 Years)

$2,704/mo

At 1989 rate (10.32%)

Principal + interest only

$1,964/mo

At current rate (6.84%)

Principal + interest only

$740/mo

1989 was more expensive

vs today on same loan

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Disclaimer: Rates shown are historical averages. Actual mortgage rates vary by lender and borrower profile. Monthly rates are estimated from annual averages and are for illustrative purposes only. Data is for educational purposes only and does not constitute financial advice. Source: Freddie Mac Primary Mortgage Market Survey (PMMS), Federal Reserve FRED, and BLS CPI-U.

← 1988 (10.34%)1990 (10.13%) →

📊 Historical Mortgage Data · Source: Freddie Mac PMMS

Mortgage Rates in 1989

30-year fixed averaged 10.32% — falling rates

10.32%

Annual avg rate

30-yr fixed

-0.02pp

vs 1988

Year-over-year

9.21%

Fed funds rate

Annual avg

+4.83%

CPI inflation

Year-over-year

Estimated Monthly Rate Trend — 1989

Estimated monthly rates based on annual averages and adjacent-year interpolation. Seasonal pattern reflects typical mortgage market spring/summer premium.

Low: 10.12%High: 10.41%Avg: 10.32%

1989 in Context — Surrounding Years

Year	30-Yr Rate	Fed Funds	Inflation
1985	12.43%	8.10%	+3.56%
1986	10.19%	6.80%	+1.86%
1987	10.21%	6.66%	+3.66%
1988	10.34%	7.57%	+4.08%
▶ 1989	10.32%	9.21%	+4.83%
1990	10.13%	8.10%	+5.39%
1991	9.25%	5.69%	+4.25%
1992	8.39%	3.52%	+3.02%
1993	7.31%	3.02%	+2.96%

Economic Context in 1989

🏦

Federal Reserve Policy

The Federal Reserve maintained a federal funds rate averaging 9.21% during 1989. The Fed maintained a restrictive monetary policy stance.

📈

Inflation Environment

Consumer price inflation was 4.83% in 1989. Inflation was within or near the Federal Reserve's long-run target range.

🏠

Housing Market Impact

With elevated mortgage rates averaging 10.32%, housing affordability was tight by modern standards. Declining rates spurred refinancing activity and supported home purchases.