The start to 2022 has been interesting! The rise of mortgage rates shocked everyone, while housing inventory remained stagnant for the most part. While I can’t say for certain how the second half of 2022 will look, here are a few trends we just might see.
1. Mortgage rates will stay higher, but increases should taper off
Mortgage rates have gone up surprisingly since the beginning of the year. That’s mostly due to the Federal Reserve’s rate hikes. While the Fed doesn’t set consumer interest rates, its actions commonly influence them. And with more rate increases expected for the year, consumers should expect mortgage borrowing to remain expensive throughout 2022.
Will we see the same jump in rates moving forward this year? Not necessarily. Right now, mortgage rates are sitting at their highest level in 13 years. They might continue to rise a bit, but it’s doubtful that they’ll climb at the same pace as they did from the start of the year until now.
2. Housing inventory increasing
Housing inventory is already starting to go up. At this point, sellers are less likely to use pandemic-related uncertainty as a reason not to sell. Inventory should continue to increase, but buyers shouldn’t anticipate a major jump, either.
3. Home prices will remain high, for now
Since inventory isn’t expected to pick up all that much during the second part of the year, home prices are likely to remain elevated. That means many buyers — first-timer buyers in particular — are apt to struggle to break into the market, especially with the higher interest rates.
Challenging times, but NOT impossible, for buyers
Buying a home may not be super easy at any point in 2022 — especially if these predictions hold. However, the GOOD NEWS is that things have slowed somewhat, inventory has gone up a bit, and buyers are finding it easier to get their dream home under contract, since the frenzy has slowed considerably since last year.
- Mortgage rates will probably remain elevated.
- Listings will come on market at higher rate, but still only modestly.
- Home values may remain high.
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