Why Today’s Rates Are More “Normal” Than You Think

Savannah Stephens — Wed, 09 Apr 2025 15:11:17 +0000

Ah, interest rates. The financial rollercoaster that makes homebuyers either celebrate or cry into their coffee.

If you’re still clinging to the memory of 2-3% mortgage rates like your favorite pandemic sweatpants, it’s time for a reality check. Today’s 6-7% rates may feel high, but they’re actually pretty average in the grand scheme of history. Let’s take a quick stroll through the decades to prove it.

The Wild Ride of the ‘70s and ‘80s

Picture this: talking about double-digit interest rates at your favorite disco club. Thanks to runaway inflation and the oil crises (like the 1979 Iranian Revolution), mortgage rates rose to 11% by the late ‘70s. After Paul Volcker became Chairman of the Federal Reserve in 1979, he decided to tackle inflation by jacking up rates. By 1981, homebuyers were staring down a brutal 18.63% mortgage rate.

That makes today’s 7% look like the clearance rack.

The ‘90s: Grunge and More Manageable Rates

As flannel shirts and Nirvana took over, interest rates finally calmed down. The economy stabilized, and mortgage rates hovered in the 7-9% range by the end of the decade. It wasn’t exciting, but it was sustainable—and became what people saw as the “new normal.”

The 2000s: Housing Boom, Bust, and Bailouts

The early 2000s brought 5-6% rates, which seemed like a Black Friday sale. But after the housing market collapsed in 2008, the Fed slashed rates to nearly zero to spark recovery. Mortgage rates dropped to 3-4%, making homeownership more affordable—but also put fuel on the fire of a housing rebound.

2020-2021: The Pandemic Unicorn Rates

And along came COVID-19. To prevent economic free fall, the Fed cut rates again, and suddenly mortgage rates dipped to a once-in-a-lifetime 2-3%. Homebuyers and refinancers rejoiced, locking in rates their parents could only dream of.

But here’s the thing: those rates were never normal. They were an emergency measure during a global crisis, not a sustainable standard… unfortunately.

Today: Back to Reality

Fast-forward to 2025, and mortgage rates around 6-7% feel like a gut punch, especially for those of us who bought at 2.25%… and again in 2024 at 6.25%—but they’re actually closer to the historical average of 7.74%. So, while it may sting compared to 2021, it’s worth remembering that we’re simply back to pre-pandemic norms.

The Bottom Line

If you’re longing for the days of 2% rates, you’re not alone—but it’s time to strap in and look forward. Those were rare opportunities. Today’s rates may feel high, but in the context of history, they’re pretty standard. And hey, at least you’re not paying 18% like they did in 1981.

How to Transfer a VA Home Loan to Get a Better Interest Rate

Shannon Kaufman — Wed, 07 Jun 2023 16:26:11 +0000

Remember those dreamy years when mortgage interest rates were happily dancing around at the 2% club?

Buying a house with the VA loan was like waltzing into a mansion with a bag of cash and a martini while waving goodbye to your old, fixer-upper from that last PCS. (Never mind that you had to battle your way to the front door through a frenzy of other homebuyers.)

Those were the days.

And now…we have these days. Where 5% is amazing and 4% is unheard of!

As a military home buyer, how do you approach this new, expensive real estate landscape?

There are a lot of options which we will cover in the next few months, but let’s first tackle one of the most interesting topics of the moment: How to Transfer a VA Loan.

Did you know, a VA Home Loan can be transferred to someone else?

As in, homeowner #1 locked in a low rate back in 2020 and now homeowner #2 would like to buy the house and also keep that same rate by assuming homeowner #1’s loan.

What!? Yes, it’s possible!

VA loans are transferable as long as your lender allows it. It is called a “loan assumption.”

What is a VA Loan Assumption?

A VA loan assumption is when a buyer assumes financial responsibility of the seller’s VA loan.

The lender will verify that the buyer of the home meets all VA loan requirements and could qualify for a VA loan on their own.

Fun fact: The person assuming the VA loan does not have to be a qualified Veteran or Servicemember, as long as they meet the lender’s financial VA loan requirements.

The buyer must meet all lender credit and income requirements, must assume all mortgage obligations, and pay the VA funding fee unless otherwise exempt.

The VA funding fee on a VA loan assumption is 0.5% of the remaining loan balance.

How do I find an assumable VA loan?

The best way to find an assumable VA loan is to work with a real estate agent. Our affiliate, WeVett Realty can help with that!

The MLS (Multiple Listing Service), which is used by REALTORs, can show homes with assumable loans.

Make sure you communicate with your agent that you are eligible for a VA home loan and would like to assume one, if possible.

You can sometimes also find other military who are open to transferring a va loan in the local facebook group or spouse group for your specific duty station.

What’s the Catch?

There’s a few liabilities when transferring a VA home loan.

VA homeowners must ask for a “release of liability” form from their lender, or their credit could take a significant hit if the assumer of the loan makes late payments or defaults.

Another catch is that if the person assuming the VA loan does not have enough VA entitlement, the seller’s entitlement will be tied up until the loan is paid in full.

What does that mean? If the buyer only has $300k in VA loan entitlement, but the house they are purchasing is $400k, they do not have enough loan entitlement to assume the loan on their own. The seller’s VA loan entitlement would stay tied up, meaning they likely could not purchase another home with a VA loan until the home is paid off.

The seller can ask the buyer to formally substitute their entitlement through a “Substitution of Entitlement” with the VA.

The ins and outs of how to transfer a VA Loan can be a bit tricky, but the end result can be totally worth it – ie. dollars saved, PCSs salvaged, and military homeownership lives on to fight another day. Thanks Assumable VA Loans!

If you’re looking to transfer a VA home loan or have more questions about the process, reach out to us at 316-669-5272 or submit a form here.

Interest Rate – WeVett