Mortgage Rates 2022

Rising Mortgage Rates 2022

Rising Mortgage Rates 2022

Mortgage rates are influenced by a variety of factors but generally reflect the general economic conditions of the time. When the economy is better, people can afford to borrow more. Through the pandemic and unemployment concerns, mortgage rates have been at historic lows for the past two years. Going into 2022, rates are beginning to rise again following a sharp increase in January due to job gains and inflation. Mortgage rates are expected to keep rising as we get further into the new year and the economy continues to rebound. 

According to the New York Times,

 “The average borrower with a 20 percent down payment would pay about $100 more a month on a new mortgage [in 2022] than one taken out at the end of last year because of rising rates and higher home prices.”  

While higher mortgage rates can reduce total demand some, for many people it may still be a great time to get into a home before rates rise further.  

Mortgage Rates - When To Buy

Consider When to Buy

Buyers may find that rising rates make right now the best time to buy. If you have been working on your finances in order to qualify for a mortgage, it may be worth applying sooner than later in order to lock in a lower interest rate. Limited inventory and record high home prices have made the current home market extremely competitive. If you are able to get pre-approved then it might make sense to start house hunting now. 

For some buyers, particularly lower income borrowers, looking for value with condos, a fixer or outdated home, or possibly building a home away from the city may be a good way to maximize purchasing power. Those struggling with housing prices may also consider moving to new areas, particularly more rural areas or simply neighborhoods farther from the city. As remote work becomes more normalized, some workers may gain flexibility as they lose their daily commute. 

Timing things perfectly is next to impossible, however – if you find a place that you like, you can afford, and it makes sense for you in the long term, that can be more important than your specific interest rate or purchase price.  We can put you in the decision making position with a brief consultation. 

Adjustable-Rate Home Loans 

Adjustable-Rate Mortgages, or ARMS, offer a fixed interest rate for a set period of time before switching to a variable rate. While this type of loan sometimes has a poor reputation, new protections have been added since the housing crisis in 2008. New ARMs include longer periods before interests can rise, as well as caps on how high rates can end up. Adjustable-rates remained unpopular in 2020 and 2021 with historic low interest rates, but some experts predict this type of loan will regain popularity as those rates rise in 2022.   Especially if you don’t plan on being in your next home longer than 3-5 years.  We can do a comparison for you to see if that makes sense for your situation.

It’s a Seller’s Market

If you are preparing to sell your home, this is a great time to list it. With current low inventory, and mortgage rates only going to get higher, it is a great time to sell and leverage your equity and perhaps utilize some of your proceeds to purchase a rental home as well as an updated home for your needs.  Let us be a resource and thinking partner for you with our amazing team. 

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