Will Home Prices and Mortgage Rates Continue To Increase in 2022?

Dated: October 14 2021

Views: 12

Freddie Mac’s chief economist expects rates to move higher for the remainder of 2021. We expect rates to average 3.7% for 2022.

His reasoning: There are two main reasons why mortgage rates are expected to rise, inflation and monetary policy. Inflation has been more durable than expectations and is rising faster, broadening to affect more goods and services.

Despite all the economic headwinds, the economy is growing and putting pressure on consumer demand given the already low and limited supply in many different industries. The supply and demand imbalances due to Covid will cause prices to continue to rise and this will impact rates to the upside until the risk of Covid recedes or the impact on the economy is blunted.

On the policy front, the Federal Reserve is positioning for both a removal of asset purchases and they have communicated their desire to start raising the federal funds rate shortly thereafter. Both of these policy actions will cause rates to rise relative to where they would be otherwise.

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Dan French

A Southern CA transplant, Dan has over 11 years in home financing with a multi-faceted background in lending and Real Estate. I have The main objective of providing the highest level of customer servi....

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