“Mortgage rates moved up again as the 10-year U.S. Treasury yield rose and financial markets adjusted to anticipated changes in monetary policy that will combat inflation,” says Sam Khater, Freddie Mac’s chief economist. “As a result of higher mortgage rates, purchase demand has modestly waned in advance of the spring home buying season. However, supply remains near historically tight levels and home prices remain high, keeping the market competitive.”
“Mortgage rates rose across all mortgage loan types, with the 30-year fixed-rate mortgage increasing by almost a quarter of a percent from last week,” says Sam Khater, Freddie Mac’s chief economist. “This was driven by the prospect of a faster than expected tightening of monetary policy in response to continued inflation exacerbated by uncertainty in labor and supply chains. The rise in mortgage rates so far this year has not yet affected purchase demand, but given the fast pace of home price growth, it will likely dampen demand in the near future.”
Homeownership continues to prove it can pay off over the long term. It is the largest source of wealth among most families, and it’s been paying back more lately.
Equity gains are increasing, making homeownership even more profitable: A homeowner who purchased a single-family existing home 10 years ago would have gained $225,000 in home equity if they sold at the Median sales price of $363,100 in the third quarter of 2021, Gay Cororaton, a National Association of REALTOR® research economist, says on the association’s Economists’ Outlook blog.
Conforming loan limits for mortgages backed by Fannie Mae and Freddie Mac have jumped in most of the country. El Dorado County. CA. increased to $647,050. Find out the conforming loan limit for 2022 in your area at FHFA.gov. You can also view the interactive map on the site.
The new loan limits took effect Jan. 1.
The 30-year fixed-rate mortgage posted a big drop this week, falling to a 3.05% average, Freddie Mac reports.
“The market volatility resulting from the COVID-19 omicron variant is causing mortgage rates to decrease,” says Sam Khater, Freddie Mac’s chief economist. “As the year comes to a close, the housing market is proceeding steadily. However, rates are expected to increase in 2022 which will impact home buyer demand as well as refinance activity.”
The Federal Reserve announced it would accelerate its bond tapering and that three rate hikes would come in 2022.
This week “mortgage rates inched up as a result of economic improvement and a shift in monetary policy guidance,” says Sam Khater, Freddie Mac’s chief economist. “While house price growth is slowing, prices remain high due to solid housing demand and low supply. We expect rates to continue to increase into 2022 which may leave some potential home buyers with less room in their budgets on the sideline.”
The housing market is hot, but some homeowners may overestimate just how hot it is when they go to sell.