Mortgage rate forecast for 2022

Mortgage rates should rise steadily
Most real estate economists agree that mortgage will steadily rise. How much is to be debated.

Low mortgage rates have played a significant role in stretching the buying power for many home buyers over the past year and a half. With home prices rising at a rapid rate, these low rates have allowed many buyers to still have a chance at home ownership in this market. Looking ahead, most real estate economists believe that we should expect to see these rates rising. Assuming mortgage rates do rise, we should see home buying demand cool off as more buyers lose some buying power. Of course, decreased buyer demand could also impact home prices. However, the general belief is that home prices should mostly stabilize.

How quickly will mortgage rates rise?

The pace at which mortgage rates will rise is certainly more difficult to predict. In particular, the ongoing pandemic creates much economic uncertainty overall. According to Nadia Evangelou, senior economist and director of forecasting at the National Association of Realtors® (NAR), she believes mortgage rates are poised to rise slowly in 2022. Due to the fact that inflation rose to its highest level since 1990, lenders ask for higher interest rates as compensation for the decrease in purchasing power. Therefore, if inflation remains high for a period of time, we should see mortgage rates follow suit.

In efforts to fight inflation, The Federal Reserve is largely expected to raise rates while also tapering its bond purchases. Overall, many expect the 30-year fixed-rate mortgage to average 3.3% in the first quarter of 2022, rising to 3.5% for the year. For perspective, the 30-year fixed-rate mortgage averaged 3.11% for the week ending Dec. 2nd.


While it is largely expected that mortgage rates will rise slowly in 2022, it may be general inflationary pressures that impact the home buying market even more. Whether it is higher costs for fuel, food, or other basic necessities, all Americans are feeling the budgetary impact of record-high inflation. Given the current economic climate, it is more important than ever for prospective home buyers to implement a thorough financial plan in order to save for a home purchase. Do you have questions? We can help.

At Live South Florida Realty, Inc. we have assisted many clients with their real estate needs. Are you looking to buy or sell a property in South Florida? Now more than ever, it is critical to have a qualified real estate team and the proper search tools behind you. Live South Florida Realty, Inc., has been a leader in the South Florida market for many years. Let our team of professionals assist you with buying or selling your piece of paradise today! In addition, our recently launched “Florida Home Search” app is now available on the Apple App Store and Google Play Store. With real-time MLS feeds, this app lets you set your own alerts to notify you as soon as a property meeting your needs hits the market. Furthermore, it will also let you know of recent closed sales in your area so that you may be even more educated on the market. Be sure to download this app for your smartphone or tablet today!

By natasha moore

REALTOR® with Live South Florida Realty, Inc.

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