What’s ahead for mortgage rates and home prices?
By Mark Marzeotti
Now that the end of 2022 is close, you may be wondering what’s going to happen in the housing market next year and what that may mean if you’re thinking about buying a home. Here’s a look at the latest expert insights on both mortgage rates and home prices so you can make your best move possible.
Mortgage rates will continue to respond to inflation. There’s no doubt mortgage rates have skyrocketed this year as the market responded to high inflation. The increases we’ve seen were fast and the average 30-year fixed mortgage rate even surpassed 7% at the end of last month. In fact, it’s the first time they have risen this high in over 20 years.
Just one year ago, rates were under 3%. This means that while mortgage rates are not as high as they were in the 80’s, they have more than doubled in the past year. Mortgage rates have never doubled in twelve months before.
Because we are in unprecedented territory, it’s hard to say with certainty where mortgage rates will go from here. Projecting the future of mortgage rates is far from an exact science, but experts do agree that, moving forward, mortgage rates will continue to respond to inflation. If inflation stays high, mortgage rates likely will too.
Home price changes will vary by market. As buyer demand has eased this year in response to those higher mortgage rates, home prices have leveled off in many markets too. In terms of the forecast for next year, expert projections are mixed. The general consensus is home price appreciation will vary by local market, with more significant changes happening in overheated areas.
Basically, some areas may still see slight price growth while others may see slight price declines. It all depends on other factors at play in that local market, like the balance between supply and demand. This may be why experts are divided on their latest national forecasts.
If you want to know what’s happening with home prices or mortgage rates, reach out to the Marzeotti Group or a trusted realtor for the latest on what experts are saying and what that means for your local area.