Home Interest Rates … Why Buying a Home Today is a Good Deal
Copyright © 2025 Prof. Dr. Dr. Dr. Tom Grooms
*Investor *Family Business Owner *Author
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Tom Grooms Family Business owner, First Place Texas Nonfiction Historical Award Author, Astrospace and Geopolitical Strategist and Forecaster, is The Father of Market Intelligence. This article is the sole opinion of the author and nonadvisory and nonpolitical.
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Caveat
This article is based upon extensive reading and research over the past 50-years teaching graduate and doctoral students’ economics.
Home Interest Rates
Today’s 7% interest rates are normal. They aren’t cheap like 3% or expensive like 18% which we have experienced in the past.
Interest rates exist for first time home buyers to begin their capital appreciation of equity building in their early years. Interest rates are not designed for seniors or those over 50-years of age.
The mortgage interest rate would best serve our nation and everyone requiring a home mortgage interest if it were permanently fixed at 5% and never changed. This would allow for financial markets to naturally stabilize and adjust over time.
Since 1954, the historical average of the 30-year mortgage interest rate is 7.3%. The past 50-year average of the 30-year mortgage interest rate is 7.7%
The 10-year treasury note determines mortgage rates, controlled by the Federal Reserve Bank instead of the Department of Treasury. It is the benchmark for mortgages because it’s the closest match in terms of risk and duration to the 30-year mortgage rate and it is disarray.
Since 1963, we have experienced an average of 6% – 7% mortgage interest rates. The year 1963 benchmarks the beginning of the decline of America.
In 1981, mortgage interest rates hit 16%. In 2019-2021, mortgage interest rates were 3%.
Anytime the mortgage interest rates are Below 5%, they are to the advantage of the individual. Anytime the mortgage rates are Above 5%, they are to the advantage of the banks and financial institutions.
The fixed 5% mortgage rate provides a compatible stabilizing anchor for interest rates to come back into perfect harmony with the markets regardless whether the rates are below 5% or above 5% in any marketing cycle or economic stage over time.
When mortgage rates are 5%, they are in perfect equilibrium with all markets. This is the Grooms Rule of 5.
(Source: Grooms, My Little Business, 2023).