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It’s been an interesting year to say the least. And while most industries have suffered throughout the health crisis, the real estate industry has been very active throughout the year, all across the country. Buyers may have stalled early on when the pandemic first hit, but things quickly picked up shortly after.
As such, home prices have increased at a rapid pace throughout the past 12 months. While the years started with mortgage rates at low levels, that has changed. Buyer demand and ultra-low mortgage rates combined to create a very competitive real estate market, but affordability is falling fast.
What will happen in the second half of 2022? According to experts, the situation is incredibly fluid. Homes will continue to appreciate, but inflation and basis point rate hikes by the Fed are pushing mortgage rates higher faster than originally anticipated, and total home sales will moderate as a result.
Check out this infographic:
Experts forecast an optimistic year for the housing market. in 2021, home prices across the US increased by 19.3%. And in 2022, they were expected to increase at a rate of 14.3%, according to real estate research firm Zillow.
As you can see, there was a general consensus that suggests that home prices will indeed rise over the next year. Similar trends were being forecasted for the Pacific Northwest.
However, those numbers are now being revised.
At the start of the year, buyers were still able to offset rising home prices with very low mortgage interest rates to make their home loans more affordable. Experts at the time agreed that interest rates are projected to remain at or near 4% in 2022, fueling strong buyer activity, and continuing the trend from 2021, when mortgage interest rates hovered around 3%.
From these forecasts, many experts felt it was safe to say that mortgage interest rates will continue to remain very low throughout 2022.
However, multiple basis point rate hikes by the Fed in an effort to slow inflation changed the game. Mortgage rates are already between 5% and 6%, and the Fed has indicated they plan 2-3 more hikes before the end of the year.
Clearly, the current mortgage rate is back on the rise, giving buyers pause when it comes to getting into the real estate market in 2022.
Home sales are now forecasted to begin to moderate in 2022 as interest rates climb. Low inventory is still fueling the real estate market across WA, OR, CO, and ID, but affordability is expected to start slowing demand.y.
Current forecasts are now projecting total home sales for 2022 to come in below 6 million, well below earlier predictions. That doesn’t mean it isn’t a good time to buy a home, especially with values still climbing.
Could 2022 be the year that you make a move and buy a home in WA, OR, ID, or CO? If so, you’ll need a mortgage to help finance your purchase. And Sammamish Mortgage would love to help!
Sammamish Mortgage has been in the mortgage industry since 1992 and has assisted many buyers in the Pacific Northwest. If you are looking for mortgage financing in Washington State, Colorado, Idaho, or Oregon, we can help. We offer plenty of mortgage programs with flexible eligibility criteria.
Contact us if you have any mortgage-related questions or concerns. If you are ready to move forward, you can view rates, obtain a customized instant rate quote, or apply instantly directly from our website.
Whether you’re buying a home or ready to refinance, our professionals can help.
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No Obligation and transparency 24/7. Instantly compare live rates and costs from our network of lenders across the country. Real-time accurate rates and closing costs for a variety of loan programs custom to your specific situation.