What Will Happen To Mortgage Rates In 2022?

Published:
June 10, 2021
Last updated:
April 26, 2022
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In 2020 we saw historically low mortgage rates. In fact, rates hit all-time lows a few times throughout 2020, making mortgages more affordable for buyers. 

Many people are wondering if the days of record lows are behind us, especially given the ongoing increases in mortgage rates week after week, despite the odd blip here and there. The question is, what will happen to mortgage rates in 2022? 

Is it Still a Good Time to Buy a Home Based on Today’s Mortgage Rates?

This year still may be a good time to secure a home loan. This is especially true given the ongoing rise in home prices. The earlier you get into the market, the more you’ll be able to save on the price of a home before they continue to increase.  

Overall, the US housing market is expected to continue to be hot moving forward for a number of reasons. Thanks to strengthening consumer confidence, the 2022 real estate markets is predicted to sizzle.

What Are Mortgage Rates Projected To Look Like For 2022?

As we make our way through spring 2022, mortgage rates continue to inch up. So far this year, rates have been ranging between 3.5 and over 5%. And as of April 2022, the average mortgage rate for a 30-year fixed-mortgage rate is 5.11%. 

So what does this mean going forward? Well, it means that there is a strong likelihood that mortgage rates throughout 2022 could continue increasing, though it’s impossible to predict with complete accuracy what exactly will happen.

In addition, year over year inflation numbers are expected to remain high and even continue climbing. While this may be temporary, it will still lead to market volatility and likely higher mortgage rates.  

A fairly recent forecast from the Mortgage Bankers Association predicted that rates could creep upward to around 4% by the end of 2022. But we’ve already seen that rates have shot past that point. Clearly, only time will tell when and just how much mortgage rates will rise this year. But, overall, rising rates are expected throughout 2022.

Today’s Mortgage Rates

Are There Any Trends That Buyers Should Keep In Mind When Navigating The Market This Year?

While navigating this year’s market, there are actually a few trends that home buyers should keep in mind. For instance, there is no denying that at present, home inventory is low and meeting buyer demand has been tricky. 

And if the last 12 months have taught us anything, it is that such an imbalance puts upward pressure on home prices and simultaneously increases competition among buyers. Low inventory has also given sellers the upper hand when it comes to negotiations. 

As a result, these trends are expected to continue to affect the housing market until demand can be met. That said, the good news here is that there has been and continues to be a concerted effort to increase residential construction, which means that new home sales will continue to rise, and eventually the market will become more balanced.

Additionally, the US economy is on its way to a full recovery of sorts, and thus consumer confidence is also on the rise. Coupled together, these two trends mean that as the economy slowly recovers, demand within the housing market is likely to grow

This added boost to the market translates to a hot housing market for the next few months. Home buyers entering a hot housing market should, therefore, expect stiff competition from other buyers. In contrast, sellers will most likely continue to enjoy their market leverage for the foreseeable future.

With The Current Rates, What Strategies Can Be Beneficial For Home Buyers In The Coming Months?

With the current rates, the first thing buyers should know is now is the perfect time to buy a home. So if you have been contemplating a home purchase, there is no time like the present. Of course, due to low inventory, as previously mentioned, it is a seller’s market. 

Therefore, it is important that as a buyer, you sharpen your home-buying tools or skills if you want to compete successfully. Strategies then that can be beneficial and will allow you to compete successfully over the coming months include:

  • Getting pre-approved sooner rather than later
  • Looking for homes under your budget so you can bid up
  • Giving yourself extra time to get your finances in order, save up for a down payment, etc.
  • Being mindful of your finances and/or home’s equity if you are looking to refinance
  • Finding the best real estate and mortgage assistance
  • Looking beyond the cost of the home when you are trying to win a house
  • Expanding your search

Ultimately, these are just a few things you can do to ensure that you successfully purchase your dream home and make the most out of the current mortgage rates in 2022.

Get an Instant Mortgage Rate Quote Today

Ready to Apply For a Mortgage?

Do you have questions about home loans or how you can get approved? If so, Sammamish Mortgage can help. We are a local mortgage company from Bellevue, Washington, serving the entire state, as well as Oregon, Idaho, and Colorado. We offer many mortgage programs to buyers all over the Pacific Northwest and have been doing so since 1992. Contact us today with any questions you have about mortgages.

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