POWER MORTGAGE
Home Prices Are Expected To Moderate Over The Next 12 Months.
What Does This Mean For The Mortgage Industry?
T
he Covid-19 pandemic upended the homebuying process. Historically-low mortgage rates coupled with an inventory shortage created a red hot market, with houses selling within hours of being listed, often for well over the asking price. After a year of bidding wars and record-high prices experienced by homebuyers in 2021, the home price growth will slow further in 2022 but will continue to rise. It is advised that homebuyers should expect similar trends to the past two years, such as elevated prices, low inventory, and fast turnaround.
scarcity of homes. Covid-19 supply chain issues and a labor shortage have only exacerbated the situation. Despite efforts by builders to increase output, inventory will remain scarce. According to CNBC, the number of homes actively offered for sale reached a new low at the end of November. Even though there will likely be more listings in the spring and summer, there will not be enough to meet demand. While the gap shrank in 2021 and is more likely to narrow in 2022, the housing shortage will be a defining feature of the market again in 2022.
Although it will be a sellers’ market — home values are likely to rise by double-digit percentage points — it will not be as ferocious as last year. None of us can guarantee that [finding] housing will be accessible. However, it seems legitimate to promise it will be less complicated than the previous year. The mortgage industry is likely to experience the following as home prices are expected to moderate over the next 12 years;
INTEREST RATES WILL RISE
INVENTORY WILL REMAIN SCARCE Even before the pandemic, the country had a 82 | MARCH 2022
In 2022, the Federal Reserve is predicted to hike interest rates several times, implying that mortgage rates would undoubtedly rise. A 30-year-fixed mortgage rate is expected to reach 3.60 percent by the end of 2022, according to Redfin and Realtor.com, up from 3.30 percent presently. Due to the rising mortgage rates, there would be fewer speculative buyers because there would be less money to be made. The market is going to be profitable and beneficial to the average
