2022 Forecast: Rates and Housing prices.

By
Mortgage and Lending with HomeBridge Financial Services (NJ) NMLS 248937

 

Happy New Year!

 

Housing prices continue to climb:  CoreLogic Home Price Index was up 1.3% in November and 18% year over year, the highest reading in the 45yr history of the index. While the pace of appreciation in 2022 is not expected to stay at these levels most forecasts show prices will continue to climb. CoreLogic only forecasts a 2.5% gain in 2022 but this time last year they forecast 2.5% as well. For 2022: Goldman forecast 16% gains, Zillow 14%, Fannie 7.5%.  I do believe that the higher two are not that realistic and we are more likely to see a more realistic number like Fannie’s.  Put into perspective, someone buying a $400,000 home today with 8% appreciation will see a $32,000 gain in equity this year. I do believe we will see at least 5% this year before we settle back down to 2-3% in 2023.

                              

Interest rates Credit markets opened this year with significant losses continuing the upward trend in interest rates that began last year. Inflation is still too high; the Fed is now expected to stop all purchases of longer-term credit securities very soon and the markets are now trying to decide if the Fed will raise rates 2 or 3 times this year. So plain and simple- all signs point to rates climbing this year with the only question being: How much higher? Even a ½% increase in rate will raise the payment on a $400k loan over $114/month. Or in other terms- a $400k home today will cost $266 more per month at the end of the year if we see 8% appreciation and a ½% increase in rates. It will cost to wait, even with conservative numbers.

Call me for all your residential lending needs!

 

Robert Rauf 
Mortgage Loan Originator NMLS# 248937
http://www.homebridge.com/RobertRauf 
or my blog: http://activerain.com/blogs/rrauf 
Office: (732)908-4868  Cell (732)740-0175 

RRauf@HomeBridge.com 
www.RobertRauf.com
 
 

Since 1987 I have been helping my clients fulfill their dream of home ownership! HomeBridge Financial Services, Formerly REMN, HomeBridge Financial Services is located at 9 Grand Ave, Building 2 Suite A Toms River, NJ 08753. NMLS #6521. New Jersey Licensed Lender and Mortgage Banker #L041053. Visit www.Homebridge.com or www.RobertRauf.com for more information. NJ Mortgages, New Jersey Mortgages, Mortgages in NJ, mortgage in New Jersey, Mortgages in New Jersey, Toms River NJ 08753, Toms River NJ 08755, Brick NJ 08723, Brick NJ 08724 Mortgage in Ocean County NJ, Mortgage in Monmouth County NJ, Jackson NJ 08527, Howell NJ 07731, Lacey 08731 08734, Beachwood 08722 Bayville 08721, 

Comments (4)

Raymond Henson, eXp Realty
eXp Realty of California, Inc. (lic. #01878277) - Elk Grove, CA
Realtor

If rates do start to tick up, which I think they will, and potential buyers believe the trend will continue, then I think we may see one more year of solid price appreciation (over 10%).  If interest rate rise quickly, then we could see some problems.  That all being said, I did not see the double digit rise last year so mine is only a guess. 

Jan 05, 2022 07:16 AM
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Hello and Happy New Year, Robert - people who are interested in making a move and need to understand the mortgage process (in general and right now) are well-advised to seek representation like you that connects with them.  

Jan 05, 2022 09:08 AM
Robert Rauf
HomeBridge Financial Services (NJ) - Toms River, NJ

Raymond Henson, eXp Realty  We can call that an educated guess!  (much the same as the "pros" that get paid to do it) The reality is that inventory is going to take a long time to meet demand, so up is a safe bet.. how much is the guess!!

Jan 05, 2022 09:20 AM
Robert Rauf
HomeBridge Financial Services (NJ) - Toms River, NJ

Michael Jacobs Happy New year to you as well!

Jan 05, 2022 09:21 AM