Predictions of 2022
The recent real estate has been experiencing record low inventory levels with home prices soaring. The question is, will home prices continue to rise, or will they fall due to the rising mortgage interest rates? Another question is will mortgage rates continue to rise? For our real estate predictions of 2022 please read below.
Mortgage Interest Rates
In the early months of 2022, we have seen the interest rates begin to rise. Experts predict that it will continue to rise. The Mortgage Bankers Association predicts that rates on the average 30-year loan will hit 4.5% of even higher by the end of 2022.
With the mortgage rate rising it will affect the buyers’ market. The prediction is you will see less competition due to the combination of rising interest rates and rising house prices because it will push some buyers out of the market. Especially after the summer buying season is over.
Home Price Appreciation
The home price appreciation will slow, but the how slow it will get is up for debate. Most experts predict it will rise. Recently released research from Zillow shows that annual home value growth is expected to accelerate through spring, peaking at 21.6% in May before slowing to 17.3% in January 2023. Fannie Mae says home prices will climb 11.2% throughout this year, followed by a more modest increase in 2023. But The National Association of Realtors, which surveyed more than 20 top economic and housing experts, predicts housing prices are expected to climb 5.7% through the end of 2022.
Higher interest rates will force buyers to shop at lower price ranges so they can afford monthly payments. Affordability is a big factor in the real estate market, this will influence the sale price of homes.
Foreclosures will rise
With mortgage forbearance programs coming to end, and due the pandemic effecting the workforce, people will not be able to make their payments. Due to so many people not having jobs, foreclosures are predicted to rise. Millions of people got mortgage forbearances during the pandemic. Those who will remain in forbearance in 2022 will most likely suffer from financial hardships.
Information from MarketWatch