By Colin R. O'Leary January 11th, 2022 The cost of borrowing money for a home is on the rise in 2022. Last week was not a great one for the mortgage industry. Seemingly overnight, the narrative has changed as mortgage rates are spiking to levels not seen in two years. By the end of the week ending on January 7th, most lenders were roughly a quarter of a point higher on a conventional 30-year fixed mortgage. Several factors including the omicron variant, inflation, fed tapering, and weakness in the bond market are putting pressure on rising interest rates. Rates have been slowly ticking upwards since August of 2021 when they were still near all-time lows. For example, rates were as low as 2.83% for a 30-year Fixed-Rate mortgage back on August 2nd, according to the site Mortgage News Daily. Mortgage rates were still at historically low levels by the end of the year, however, gradually rising above 3%. Now less than two weeks into the New Year and we're seeing rates rise to the highest levels in 2 years. The interest rate for a 30-year fixed-rate mortgage is currently hovering around 3.64%, as of January 11th, 2022. Many experts in the real estate industry are predicting that rates will rise above 4% in 2022. If rates continue to rise at this level, it won't be long before that happens. How will rising mortgage rates affect real estate prices? It could be bad for sellers in some markets. Higher mortgage rates mean fewer buyers in the market. Fewer buyers in the market mean fewer offers being made. This could put a damper on fast-rising real estate prices around the country, especially in markets with higher inventory levels. Markets with lower levels of inventory should continue to favor sellers in 2022 even with rising mortgage rates. Rising mortgage rates are not necessarily bad for all home buyers and investors though. If home prices decrease in 2022, it could potentially offset rising mortgage costs compared to paying for a home at current home values. How do you think rising mortgage rates affect the real estate prices in 2022? Let us know your thoughts in the comments below.
0 Comments
Leave a Reply. |
Archives
April 2022
Follow The Big City Team on Social Media! |