The housing market in the United States is undergoing a recalibration. Coming off the COVID-19 pandemic and all the economic impacts it had, we are seeing a shift. Extraordinarily high home prices and buyer bidding wars are becoming less frequent as the market gears up for a potential recession. This may have you questioning mortgage rates in 2022. Look no further for our deep dive into everything you need to know to understand what is happening with mortgage interest rates.
With a recession on the brain for many economists, mortgage interest rates have actually taken a slight dip, despite what you may have heard about them being on the rise. Although rates are indeed higher than they once were during the extreme low of the pandemic, they still are not at unreasonably high levels.
Even still with the current dip, rates are increasing when comparing them to recent years. But why?
Interest rates are determined by the state of the market. Meaning the stock market, inflation, consumer spending habits, and other economic factors. During the pandemic, the government slashed interest rates to ensure buyers were still going to be willing to buy and sell a property. This is because if spending stops, a recession happens. In short, the state of inflation right now is what is causing interest rates to rise across the country.
Real estate transactions
With rising interest rates, you may be wondering if now is a good time to sell or buy a home. Currently, there are more sellers in the pool, which means higher inventory and overall, less value in homes. That makes right now a great time to buy, despite the rising interest rates.
A good thing to remember when considering buying a home is “marry the home, date the rate.” An interest rate can change during a refinance at a later time, so don’t let higher rates discourage your move if you’re in the position to do so.
What about for sellers? Now also isn’t a terrible time to sell. Homes are still going for a fair price, and you won’t be nervous about meeting your appraisal value. There are still a good number of buyers willing to purchase, so you likely will get under contract quickly.
As a homeowner, now is a fine time to feel comfortable in your investment. As stated earlier, there are still plenty of buyers willing to buy and sellers willing to sell. It may not be a great time to refinance, depending on your current rate of course. But it is still not a time to worry about your homeownership.
Overall, it’s important to remember that the real estate market and interest rates are always changing. That is the only constant of anything economic-related. Yes, the rates are increasing in comparison to the record lows we have seen in recent years, but this recalibration is necessary for the housing market to be able to continue to thrive for years to come.