How long will mortgage rates stay high?

Mortgage rates have become the headline, the subplot, and the ambient soundtrack of the housing conversation. In this episode of Selling Greenville, the host pulls up the St. Louis Fed’s 30-year fixed mortgage chart and walks through decades of history to answer the question on everyone’s mind: when do elevated rates actually come back down? The exercise is simple but powerful—identify past spikes, see how long they lasted, and note what finally brought them back to earth.

One quick caveat straight from the show: the Fed’s series tends to read a little lower than what borrowers see day-to-day. It’s still the best long-view yardstick for spotting patterns.

How long will mortgage rates stay elevated?

How long will mortgage rates stay elevated? The approach was to scan for periods when rates jumped roughly a full percentage point in a year or less and then measure how long it took for them to return to pre-jump territory. The point isn’t to predict a precise date; it’s to set expectations that are rooted in the way rate cycles have behaved before.

“High” is relative—two ways to see today’s rates

The podcast keeps two truths in view:

• The very long view: Stack today’s ~7% against the 1980s, when mortgage rates ran in the high teens and even flirted with 20%. From that distance, today isn’t “high.”

• The lived-experience view: Look only at the past 20 years—the period most homeowners actually remember—and today’s rates are the highest in roughly two decades. That matters for real-world behavior.

With that context, the host zeroes in on the modern era from 1987 onward, since the early-’80s volatility would skew any reasonable comparison.

What history shows: the “spike and stay” pattern

The episode tours several distinct cycles and clocks how long it took to round-trip back to pre-spike levels:

1987: a fast surge, then a long wait

• Setup: Rates dipped to about 9% in March 1987, then jumped to ~11.5% by October.

• Return time: Not until September 1991—roughly 4.5 years—did they revisit that 9% zone.

• Lesson: In that era, once rates leapt, they stayed elevated for years.

1993–1998: the bounce, the chop, the grind back

• Setup: Around October 1993, rates touched ~6.74% and then climbed into the low 9s by late 1994.

• Path: They slipped to the low 7s in early 1996, popped back into the low 8s that summer, and finally fell below 7% in June 1998.

• Return time: Nearly five years from the 1993 trough to seeing sub-7% again.

• Lesson: Volatility can drag on; the “trip back” is measured in years, not months.

1998–2000: quicker spike, shorter elevated stretch

• Setup: From ~6.6% in mid-1998 to around 8.5% by mid-2000.

• Duration: About 1.5 years of elevated rates before easing.

• Lesson: Not every cycle lasts half a decade, but the speed can still sting.

2003–2008: a long plateau after a rise

• Setup: Rates near ~5.2% in June 2003 jumped into the mid-6s by August and mostly hovered between high-5s and mid-6s into 2008.

• Return time: Back to the low-5s in December 2008—over five years—as the Great Recession hit.

• Lesson: Recessions repeatedly align with mortgage-rate relief.

2013–2019: bumps without real “pain”

• Setup: In April 2013, rates in the mid-3s moved into the mid-4s within months, then hovered close to ~4% until 2017, and briefly touched ~5% in late 2018.

• Lesson: The 2010s were comparatively stable—nothing like the snapback after 2021.

2020–today: the anomaly

• Setup: Pandemic lows fell to generational records…and then the 2021–2023 surge doubled rates from the 3s to the 6s/7s with startling speed.

• State of play: As the episode was recorded (end of June, released mid-July), many borrowers were again staring at ~7% 30-year quotes.

What consistently pushes rates down?

The show underscores a reliable rhyme: recessions. On the Fed’s chart, every recession lines up with declines in mortgage rates. There’s often a small after-bump when a downturn ends, but it typically remains below pre-recession levels.

The host also notes that recent months have shown how bond-market volatility and broader economic jitters can yank mortgage rates around even when the Fed’s moves are incremental. Earlier bank stresses didn’t prompt an immediate Fed pivot; policymakers kept tightening. That’s a reminder that mortgage rates don’t always move lockstep with headline policy—especially when inflation fear and market spreads are doing their own thing.

Near-term baseline—and a realistic path to relief

Based on the historical cycles and the current setup, the episode offers a pragmatic outlook:

• Baseline for the next 6–12 months: Plan for elevated rates. The show’s expectation is that the 6–7% zone persists in the near term.

• 2024: Some relief is possible if inflation cools and spreads normalize, even without dramatic policy moves.

• 2025 (optimistic scenario): If the economy softens and policy truly eases, mid-to-high 5s look plausible—and in a best-case, high-4s could be achievable. That’s optimistic, not a promise.

• What not to expect: A return to pandemic-era 2s–3s. The episode’s stance is clear—those were extraordinary and may never repeat.

The larger lesson: historically, elevated cycles often last years. The modern bump is unusually fast and sharp, but history still argues for patience rather than a quick snap-back.

What that means for actual decisions

Buyers

• Underwrite your plans with rates in the 6s/7s. If a lower window opens later, refinancing can be a strategy, but it shouldn’t be the plan’s linchpin.

• Product choice matters. Many still prefer the security of a 30-year fixed, which is why the episode centers its analysis there.

Sellers

• Higher rates have thinned the “on-the-edge” buyer pool, but demand hasn’t vanished. The host points out that demand stabilized after the late-2022 bottom, even as rates stayed high.

• Pricing and presentation still decide who moves and who sits.

Owners with ultra-low loans

• The “lock-in” effect is real. Swapping a 3-handle for a 6/7-handle is a tough sell—one reason inventory remains tighter than it would be in a normal cycle.

Why the timeline matters

If your horizon is this year, treat elevated rates as the base case. If your horizon is two to three years, a milder environment looks much more plausible, especially if a recession nudges rates down. Either way, the episode’s advice is to make decisions based on the market you have, not the market you wish would show up.

Throughout the show, the host returns to one practical refrain: set plans to work at today’s rate, and treat any future dip as a bonus, not a baseline.

Watch Or Listen To The Selling Greenville Podcast

Subscribe to the Selling Greenville podcast for real-time insights, bold perspectives, and unfiltered takes on the Upstate housing scene. Whether you’re buying, selling, or simply watching the market unfold, this is where Greenville goes to stay informed.

Bottom Line

History says mortgage-rate spikes tend to linger, and relief usually arrives with recessions—not wishful thinking. The episode’s measured view: expect 6–12 months of elevated rates, watch for some easing in 2024, and look to 2025 for the most meaningful improvement—likely the mid-to-high 5s, with high 4s as the optimistic outlier. Don’t plan your life around the 2s and 3s returning. Plan for the market you’re in, and keep flexibility for the one that might be coming.

Ien Araneta

Journal & Podcast Editor | Selling Greenville