Mortgage rates are expected to rise to 4% in 2022, according to CNBC.com. In an article posted on October 18, 2021, the news site says that "The average rate on the popular 30-year fixed loan will rise to 4%, a full percentage point higher than it is now, MBA economists say. That will result in a 62% drop in refinance originations to just $860 billion. It deepens the anticipated 14% decline in 2021 to $2.26 trillion." While that is not great news for lenders, the article continues by saying that "Originations for the purpose of buying a home, however, are forecast to rise 9% to a record of $1.73 trillion in 2022," meaning that the real estate market should stay strong. While increasing mortgage rates seem ominous in our industry, the one-point jump is still not enough to deter home buyers. Rates have been historically low so buyers have been spoiled, but 4% for a 30-year fixed mortgage is still a great interest rate.
We will see where 2022 takes the real estate market, but I have a feeling that it will continue to be very active even with a slight mortgage rate hike.
To read the full CNBC.com piece, click here.