If you’re planning on buying a new home or refinancing your existing mortgage in March of 2022, tapping into the latest trends in the mortgage market can help you make more informed decisions. Having an understanding of recent developments like changes in mortgage interest rates, the current housing market, and economic conditions can save you time and money.

At Neat Loans, we are dedicated to cleaning up the home financing process, so you can get your mortgage without the mess. That’s why we’ve distilled the latest in March mortgage market trends into this quick monthly update.

The market is always changing, and interest rates are in constant flux, so when you’re ready to make a move, check with a trusted home loan advisor.  In the meantime, here’s what you need to know about mortgage market trends in March 2022.

Are March 2022 mortgage interest rates currently higher or lower?

Mortgage rates are increasing. January and February saw increases in interest rates for both fixed and adjustable. Since fall of 2021, the Federal Reserve has been slowing their purchasing of mortgage backed securities. This first began impacting interest rates on December 20th, 2021. By the end of February, mortgage rates increased from 3.69% for a 30-year fixed on Feb. 10 to 3.92% on Feb. 17. This is the highest average we have seen since May 2019.

The Mortgage Report determined that the reason for this rise is a combination of high consumer spending and inflationary pressure. This paired with the Omicron virus’ lessening impact on the economy, mortgage interest rates are starting to head back into the 4% range in March 2022.

Are mortgage interest rates going to increase in the near future?

Mortgage rates are expected to continue to rise. Today, inflation is at 7-7.5%, and experts predict the Fed will combat this with a “rate hike.” Experts predict interest rates to rise half a point on March, 16th. This would bring rates to above 4% for the first time since 2019. From there, five other quarter point rate increases are expected periodically throughout 2022 and 2023.

“Inflation is systemic. This 7.5% and rising inflation will force the Federal Reserve to move interest rates up aggressively in 2022 – and history tells us that once they start, they tend to move upward at least eight times and a total of 250 to 500 basis points. That means get ready for a 3%–5% 10–Year Treasury by the end of 2023.” 

– KC Conway, economics advisor to eXp Commercial Realty

Are homes currently more or less expensive in January 2022?

Home prices have been historically high, but are expected to ease. Over the past year, there has been a growing demand for housing, and prices have risen to record levels across the nation. However, despite the rise in rates, Freddie Mac now predicts that refinance and purchase activity will remain stable. This counteracts their previous prediction that the market would soften and ultimately cause a decrease in the price of homes.  Instead, the cost of housing nationwide has risen another 2-4% since the end of 2021. The amount of available listings has decreased 60.4% since January, 2020. As of January 2022, the average cost of a Colorado home is $520,000. This is up from $488,600 in 2019.

Due to the low availability, the rapid rate of home sales has begun to slow. Despite this, forecasters still expect a strong housing market and continued high home prices in 2022, just not at the rapid level of growth seen during 2021. 

Where are the hottest real estate markets? How fast are homes selling, and how much are they selling for?

Across the nation, homes sold in an average of 61 days in January 2022, 10 days faster than January 2021. We are still in the midst of a supply crisis; according to the Federal Reserve Economic Data, there were only 408,922 active listings in January 2022. This is down from 747,839 in 2020, and 1,310,899 in 2019. Buyers face real challenges with the low supply of available housing, making it more important than ever to go into your housing search with a real estate expert at your side. With record high home pricing in metropolitan areas, and a sudden shift to work-from-home lifestyles due to COVID-19, the majority of homebuyers are shopping in smaller cities. 

The hottest housing markets are moving to the suburbs. Realtor.com conducted surveys to determine the hottest projected real estate markets for 2022. Determinants include where homes are selling the fastest (shortest time listed), and where the majority of buyers are searching property listings. Realtor.com projects Salt Lake City, Utah to experience a 15% growth in sales, and an 8% increase in price in 2022. Boise City, Idaho and Spokane/Spokane Valley Washington are close behind.

Most prospective homebuyers in the COVID-era are working families and first time home buyers looking for an average sized 3 bedroom single family home. A lot of homebuyers are moving out of expensive states such as California and New York. High taxes and reduced need for proximity to the city are causing locals of these areas to vacate to neighboring states, such as New Hampshire and Washington. 

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Conclusion: What are the main factors currently affecting March 2022 mortgage rates and the housing market?

Various factors can drive home prices, housing availability, and mortgage rates:

• The decrease in impact caused by the COVID variants is making the economy more stable and secure, leading to a rise in interest rates. 
• Interest rates will begin to rise soon to combat the high inflation rate of 7.5%.
• The Federal Reserve (the entity designed to protect the U.S financial system and support a healthy economy, often called the Fed) has bought 40 billion dollars in mortgage-backed securities (MBS) per month to keep mortgage rates low. Mortgage rates are expected to rise when the Fed stops the purchase of these mortgage-backed securities in 2022.5

Though rates are on the rise, keep your eye on the market and check out today’s rates at neatloans.com. 

Sources:

https://themortgagereports.com/32667/mortgage-rates-forecast-fha-va-usda-conventional

https://www.kiplinger.com/economic-forecasts/interest-rates

https://www.freddiemac.com/research/forecast/20220121-quarterly-economic-forecast

https://fred.stlouisfed.org/series/ACTLISCOUUS

https://www.realtor.com/research/top-housing-markets-2022/

Thanks for reading! Please note that this content is intended for educational purposes only. As laws and lender requirements change regularly, you should speak to a home loan advisor about your particular situation. If you’re interested in purchasing or refinancing a home,  check out today's mortgage rates or get pre-approved in 3 minutes.