Home News When mortgage rates last soared this much – Orange County Register

When mortgage rates last soared this much – Orange County Register

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“Memory Lane” takes a walk in the history of finance because of the interesting habit of repeating the economy.

Buzz: Mortgage rates have hit a week-long surge since 1987.

sauce: An average 30-year fixed rate mortgage from a Freddie Mac survey.

number: Interest rates soared to 5.78% on June 16th, up 0.55 percentage points from 5.23% seven days ago. In April 1987, interest rates surged 0.84 points in a week, jumping from 9.43% to 10.27%.

How long ago?

Bottling your memory …

1987 News: Iran Contra’s scandal seizes US politics, Iraqi missiles hit USS Stark during the war between Iraq and Iran, and televangelist Jim Backer and US Senator Gary Hart both I was involved in an unfaithful scandal. Locally, the Whitiana Loews earthquake rattled the San Gabriel Valley.

Culture of 1987: Beverly Hills Cop II was the top box office revenue, and Bon Jovi’s “Livin on a Player” was number one on the charts. The first Panera Bread has opened. The Los Angeles Lakers won the NBA Championship.

Inside story

In 1986, a large federal tax card pushed by then-President Ronald Reagan put a lot of cash in an American checkbook.

At the same time, the Fed has revoked the high interest rate policy that pushed inflation down and stagnated the economy.

The federal funds rate is estimated to have fallen below 6% in the fall of 1986, after central bank control approached 20% in the first half of 10 years. This key rate was the lowest in 10 years.

Mortgage rates worked as expected, dropping to 9% in February 1987. This is the worst in 10 years. It certainly explains the 7% price increase for California homes in 1986.

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