News US Economy News Mortgage Rates This High Have Sunk Home Prices in the Past Off the Charts: The Visual Says It All By Diccon Hyatt Published on October 12, 2022 Fact checked by Mrinalini Krishna Photo: John M Lund Photography Inc / Getty Images The last time mortgage rates got as high as they are now, home prices fell off a cliff. Will it happen again? The average rate for a 30-year fixed mortgage rose to 6.81% last week, a level not seen since July 2006, the Mortgage Bankers Association said Wednesday. That was an ominous date in the housing market since it was shortly before prices began a years-long slide, ultimately losing more than a quarter of their value before beginning to recover according to the S&P CoreLogic Case-Shiller House Price Index, as the chart below shows. Those high mortgage rates are making monthly payments balloon, keeping many buyers out of the market, and have put downward pressure on prices. While the situation is very different in many ways from what came right before the Great Recession, experts still predict a drop in prices, albeit not quite as severe as what happened in the early 2000s. Have a question, comment, or story to share? You can reach Diccon at email@example.com. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. Mortgage Bankers Association. "Mortgage Applications Decrease in Latest MBA Weekly Survey."