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When will mortgage interest rates go down again? Predictions for 2022

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Americans are being hit by rising prices for pumps, supermarkets, and homebuyers. Mortgage rates continue to skyrocket as home prices skyrocket. Despite being short Falling mortgage ratesLast week, the 30-year fixed rate surged by more than 0.5 percentage points. Maximum weekly increase In a Freddie Mac survey since 1987.

“These higher rates are the result of changing expectations about inflation and the direction of monetary policy.” Freddie Mac Chief Economist Sam Carter said. “Higher mortgage rates help ease the blazing pace of housing activity that has experienced a pandemic break. The end result is a more balanced housing market. “

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When will mortgage rates fall?

The 30-year fixed rate mortgage Average 5.78% as of June 16th, The best since late 2008. Homebuyers are in a pinch, but prices have historically been low, Only 2.93 percent a year ago.

However, this rise exceeded industry expectations by the end of 2021. Mortgage rates began to rise from the end of the year to the end of the year. Most estimates show that by the end of 2022, average 30-year mortgage rates had reached 4.5%. The price exceeded the mark in early April. Since the start of 2022, housing borrowing costs have increased most rapidly since 1994. According to Freddie Mac, the latest jump of 50 points in the biggest week since 1987.

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US Weekly Average Mortgage Interest Rates As of June 16, 2022 Source: Freddie Mac

The discrepancy between expectations and reality is a factor that has changed dramatically. Inflation and the Federal Reserve’s response to tame it. Central banks intend to move to curb inflation at the end of last year, Prices have accelerated more than expected, reaching a high for the first time in 40 years.

As a result, policy makers have implemented more than expected rate hikes. The latest implemented on June 15th Jump at 75 basis points, It was the fastest rate hike since 1994, higher than the expected 50 basis point increase. This represents bad news for those who want to see the decline in mortgage rates immediately, as inflation remains high and lending rates are rising.

How high is the mortgage rate?

Current forecasts are that 30-year mortgages will remain at high levels until 2022. Mortgage Bankers Association June forecast Predicting 5% at the end of 2022, After that, it will gradually decrease to 4.4% by 2024.

Lawrence Yun, Chief Economist of the National Association of Real Estate Agents, said: Forbes Last week he Interest rates are expected to exceed 5.5% for several months. But I haven’t seen them breaking 6 percent. “Most of the changes in mortgage rates from the expected Federal Reserve monetary policy changes are already priced. Therefore, future rate hikes by the Fed may not have much of an impact on mortgage rate hikes. ” He said.

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