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Mortgage Trends in 2022

July 8, 2022

Mortgage Trends in 2022

We’re halfway through the year, and 2022 has already been an eventful one in the mortgage and real estate worlds. Specifically, during the spring home buying season, we saw rising mortgage rates and home values, making it more difficult for many potential home buyers to purchase a home. So, it’s no longer a question of if or when mortgage rates will increase but how much they will rise and how long this will last.

At The Mortgage Firm Gainesville, we’re here to guide you through finding the perfect mortgage solution for you and your family no matter what the economy brings. Our goal is to help you feel supported and informed throughout your home buying experience. Read on to learn more about 2022 mortgage trends and what we might expect heading into 2023.

Mortgage Trend Factors

Some reports suggest that the housing market has peaked and is slowly swinging back in favor of home buyers. But for now, potential buyers are still facing some challenges that can make buying a home more difficult.

Home Prices

According to the Federal Housing Finance Agency (FHFA House Price Index), home prices rose 18.7% from the first quarter of 2021 to the first quarter of 2022. The imbalances in the housing market’s supply and demand lead most experts to predict higher home prices for the rest of the year. And while home prices aren’t expected to drop, they will likely rise more slowly than we’ve seen in the recent past.

So as a home buyer, how can you purchase your dream home for a price that won’t break the bank? The most important thing is to start with a budget and stick to it, even if the home you’re after winds up in a bidding war.

Interest Rates

Inflation and the Federal Reserve’s monetary policy affect mortgages. As inflation worsens, the Federal Reserve tightens its monetary policy, or how it responds to the economy to regulate long-term interest rates, leading to higher mortgage rates. The Fed intends to slowly ease its market support by decreasing its purchase of mortgage-backed securities and Treasury bonds.

Will mortgage rates go down in 2022? Experts anticipate that the 30-year, fixed-income mortgage rate will hover between 4.8% to 5.5% by the end of 2022.

Home Availability

If you’ve talked to anyone in the market to buy a home lately, you have undoubtedly heard grumblings about low inventory or bidding wars on the homes for sale. That’s no surprise — as of 2021, the US was estimated to be 3 million homes short of the demand from prospective buyers.

So what can home buyers do to overcome the shortage? Options include building new, renovating an existing home, and working with a local realtor who may know of listings that haven’t yet hit the market.

The Mortgage Firm Is on Your Side Anytime

What will mortgage rates look like in 2023? Industry leaders suggest that within the next few years, there should be a slight correction in home prices and mortgage rates — Fannie Mae predicts that home prices may climb just 3.2% in 2023. So, if you aren’t ready to buy your home now, keep an eye on the market to be ready for this correction and make a move then.

But, if you’re ready to buy your home now, the expert team at The Mortgage Firm Gainesville is ready to help. We’ve guided many potential home buyers through the market’s changing conditions on their path to purchasing their dream homes. Reach out to us to learn more about current mortgage rates, our many mortgage options, and what we can do to help you become a homeowner.