What Will Really Happen To The Housing Market After Rate Hikes?
2021 saw an all-out boom in the real estate market that led to massive price increases as well as bidding wars, with so many people looking to buy homes compared to how many were up for sale. Low interest rates also helped the boom along, with most 30-year mortgage rates hovering right around 3%, according to NBC News.
However, much of what has driven those low interest rates is support from the Fed, mostly to aid the economy during the pandemic. And the Fed will likely be pulling back some of that support this year. According to market experts interviewed by Forbes, the interest rate will likely climb into the high 3% to 4% range by the end of 2022. With rates rising, fewer mortgage-holders are refinancing, which is a trend we can expect to continue through 2022. And the homebuying frenzy will slow a bit, but it will still be very much a seller's market.
Buying a home in 2022? Here's what to expect
If 2022 is the year in which you hope to buy a home, there are a few things to keep in mind. There will still be fewer homes for sale than customers demand, which means it's still a seller's market. However, things will slow down from the conditions we saw in 2021, in which homes often soared in price and sellers were often in the enviable position of having bidding wars on their listings, regardless of price point. The market will normalize somewhat, though it will continue to be a rough market for first-time buyers due to steep prices and increasing interest rates, according to CNBC.
Long story short: Sellers can still expect to see a competitive but somewhat slower market; new buyers will be dealing with a rough market, and those who want to refinance should do it sooner rather than later before rates climb much more.