If you’re planning on buying a new home or refinancing your existing mortgage in April of 2022, tapping into the latest trends in the mortgage market can help you make a more informed decision. 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.

Are April 2022 mortgage interest rates currently higher or lower?

Mortgage rates are increasing. 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. For the first time since 2019, mortgage rates have breached 4%. By the end of March, mortgage rates were 4.625% for a 30-year fixed, 3.70% for a 15-year fixed. This is the highest average we have seen since May 2019. However, the rapid increases we saw in March are predicted to steady in April 2022. Rates are expected to hover around 4.5% for the following month, however this is not guaranteed. 

The Mortgage Report determined that the reason for the drastic rise in March was a combination of high consumer spending and inflationary pressure. This paired with the Omicron virus’ lessening impact on the economy, as well as the uncertainty brought on by the war in Ukraine, are also factors contributing to the steady increase.

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.” Interest rates rose steadily at several points throughout February and March 2022. The following chart depicts rate movement throughout the past two months.

• 30-year fixed-rate refinance: 4.625%, down from 4.750%, -0.125
• 20-year fixed-rate refinance: 4.500%, down from 4.625%, -0.125
• 15-year fixed-rate refinance: 3.750%, down from 3.875%, -0.125
• 10-year fixed-rate refinance: 3.625%, down from 3.750%, -0.125

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According to Kiplinger Economic Forecast, there are six more Federal rate hikes scheduled for 2022. These rate hikes are in place to combat the rising inflation of nearly 8%. The Fed will also enact a practice known as “quantitative tightening”, where they will begin selling Treasury and mortgage backed securities from their balance sheet. This practice is to decrease the amount of liquidity in the market, having the opposite effect of quantitative easing. Essentially, instead of creating and producing more money, they will produce less– causing interest rates to rise and buyer activity to soften.

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 home in Colorado 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?

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 have been shopping in smaller cities. However, with the effects of the pandemic lessening across the US, hot markets are beginning to shift away from affordability and back toward the city. 

The hottest housing markets are moving away from affordability. Realtor.com conducted surveys to determine the current hottest 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 listed their top selling states for the first quarter of 2022; California, Colorado, Florida, Indiana, Kansas, Massachusetts, Maine, Montana, North Carolina, New York, New Hampshire, and Ohio. Throughout the past 2 years, expensive cities and states lost a lot of appeal due to the ability to work from home. Now, expensive cities are getting more traction. Orlando, Florida struggled in the early days of the pandemic but is now the fastest growing market 7 months in a row, jumping 151 spots in hotness since this time last year.  

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 may 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. They are now planning to sell these securities to foster quantitative tightening. 
• Hot markets are moving back to more expensive cities. 

Though rates are on the rise, you still have time to take advantage of low rates today. Keep your eye on the market and check out today’s rates at neatloans.com. 

Sources: 

Mortgage interest rate predictions: Will rates go down in April 2022?

Today's mortgage rates fall for 3 terms | March 24, 2022

What impact will QT have on financial markets?

Quarterly Forecast: The Housing Market Expected to Remain Stable Despite Rising Rates and Cooling Price Growth

Housing Inventory: Active Listing Count in the United States

Hottest Housing Markets

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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.