Loading CalcVerseAI...
COVID pandemic; emergency cuts to near-zero; rates end year at 2.7%
3.11%
Annual avg rate
30-yr fixed
-0.83pp
vs 2019
Year-over-year
0.36%
Fed funds rate
Annual avg
+1.23%
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.
The Federal Reserve made two emergency cuts in March 2020 — totaling 150 bps — dropping the fed funds rate to 0–0.25%. It also launched unlimited QE, purchasing Treasuries and MBS without cap. The balance sheet grew from $4T to $7T in nine months.
CPI rose only 1.2% for the year as the pandemic collapsed demand. Supply chains were disrupted but demand destruction was more powerful. Deflation fears briefly returned in spring.
Mortgage rates fell from 3.7% in January to a then-record 2.7% by December. The pandemic "zoom-town" effect drove unprecedented demand for suburban/rural homes. Housing prices began surging as inventory collapsed.
$1,283/mo
At 2020 rate (3.11%)
Principal + interest only
$1,964/mo
At current rate (6.84%)
Principal + interest only
$681/mo
2020 was cheaper
vs today on same loan