U.S. Mortgage Rates by Occupancy: Trends 2020-2024
Data Points
Year Occupancy Type Interest Rate 2020 Primary Residence 3.291% 2020 Investment Property 4.444% 2020 Second Residence 3.22% 2021 Primary Residence 3.115% 2021 Investment Property 4.173% 2021 Second Residence 3.131% 2022 Primary Residence 4.912% 2022 Investment Property 5.783% 2022 Second Residence 4.776% 2023 Primary Residence 6.525% 2023 Investment Property 7.84% 2023 Second Residence 6.925% 2024 Primary Residence 6.502% 2024 Investment Property 7.883% 2024 Second Residence 7.054%
Date Published:
September 2, 2025
Date Updated:
September 3, 2025
Chart type:
Bar Chart
Suggested Citation:
Polygon Research. "Interest Rates by Occupancy Type for Home Purchase Loans (1-4 Unit Properties, 2020-2024)". Polygon Vision – HMDAVision. September 2025. Home Purchase, 1-4 Units
Key Insight and Commentary
Interest rates for home purchase loans have climbed sharply since 2020, but the spread by occupancy type tells a bigger story. By 2024, borrowers financing investment properties are paying over 1.3 points more than primary residence borrowers, with second homes now priced much closer to investor loans.
For banks, credit unions, and IMBs, the implications are clear.
- Primary residences retain a relative cost advantage, sustaining demand and aligning with the mission of supporting homeownership.
- Investment properties face headwinds, as nearly 8% rates make rental acquisitions less attractive, so expect lower origination volume but keep an eye on future refinance opportunities when spreads narrow.
- Second homes now carry a higher premium, likely reducing discretionary purchases and reshaping borrower expectations in lifestyle markets.
The takeaway
This environment calls for sharper portfolio segmentation. Use open data to identify the borrower cohorts most sensitive to interest rate differentials. Strategy, not volume chasing, will define success in 2025.
From Analysis to Action
This analysis provides a clear blueprint for how to uncover meaningful market dynamics. Its true power is unleashed when you apply this same methodology to your own local markets. Because all real estate is local, this granular approach is essential for crafting precise strategies that effectively address the unique conditions of each community.
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