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January 6, 2022

Mortgage Market Trends in January 2022 

Mortgage Market Trends – January 2022 

If you’re thinking of buying a new home or refinancing your existing mortgage in January of 2022, tapping into the latest  mortgage market trends can help you make more informed decisions. Having a basic 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 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 advisor or use Neat's mortgage rate estimation calculator.  In the meantime, here’s what you need to know about mortgage market trends in January 2022.

Are January 2022 mortgage interest rates currently higher or lower?

Mortgage rates are beginning to increase. After several months of steadily low interest rates, mortgage rates are on a slight increase. The federal reserve has been contributing to low rates by purchasing mortgage backed securities. In the fall of 2021, they decided to slow purchasing these securities until they reach zero. This is estimated to begin impacting interest rates as of December 20th, 2021. By January, mortgage rates are likely to increase to 3.75 for 30 year fixed rates and 3.1 for 15 year fixed, which are 2.88% and 2.36% rate increases respectively.

Freddie Mac determined that the reason for this rise is a combination of an increase in buyer demand and a decrease in available home inventory, which, combined with the end of the federal reserve’s purchasing of mortgage backed securities, is beginning to drive mortgage interest rates back into the 3% range in January 2022.


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

Mortgage rates are expected to continue to gradually rise. While rates aren’t expected to spike rapidly any time soon, they are forecasted to increase gradually over the next couple of years, according to Freddie Mac. At the end of 2021, the organization predicted 30-year rates will be around 3.5%, rising to 3.75% by early 2022. With this rise in rates, Freddie Mac predicts refinance activity will soften and the cost of housing will slightly decrease as demand decreases.

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, Freddie Mac experts predict the increased demand for housing will soften. Recent record high housing costs have discouraged buyers from purchasing new homes, despite low mortgage rates. 

Nationwide, the cost of housing has risen an average 18.1% throughout 2021. Recently, the rapid rate of home sales has begun to slow, and Freddie Mac experts predict the cost of housing will fall approximately 7% over the next few years. 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 67 days in December 2021, 13 days slower than in 2020. We are still in the midst of a supply crisis; according to the Federal Reserve Economic Data, there were 553,510 active listings in November 2021. 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. 

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

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

  • The increase in COVID-19 cases due to the Delta and Omicron variants has created uncertainty, pushing the 10-year Treasury yields and interest rates lower.
  • Interest rates could rise as a result of increased household spending, economic growth, rising demand for homes and mortgages, inflation, and U.S. jobs performance.
  • 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, Neat Loans still offers some of the lowest rates available on the market. Check out today’s rates on Neat's website.

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 three minutes.

Source Information: 

  1. Mortgage rate predictions for 2022: How high will rates go? Mortgage Rates, Mortgage News and Strategy : The Mortgage Reports. (2021, December 3). Retrieved January 6, 2022, from https://themortgagereports.com/86225/mortgage-rates-forecast-2022 
  2.  Quarterly Forecast: Strong housing market expected to persist notwithstanding rising mortgage rates and continued high home prices. Freddie Mac. (n.d.). Retrieved January 6, 2022, from http://www.freddiemac.com/research/forecast/20211015_quarterly_economic_forecast.page
  3. Housing inventory: Active listing count in the United States. FRED. (2021, December 6). Retrieved January 6, 2022, from https://fred.stlouisfed.org/series/ACTLISCOUUS 
  4. Hale, A. D., CHIEF ECONOMIST (2021, December 10). Top housing markets for 2022 - Realtor.com research. Realtor.com Economic Research. Retrieved January 6, 2022, from https://www.realtor.com/research/top-housing-markets-2022/ 




Jen Farmer

Chief Marketing Officer
Top-performing marketing leader with consistent appointments to higher levels of seniority at a $15B S&P 500 healthcare corporation. Broad B2B and consumer marketing experience in both strategy and execution, leveraging an analytical mindset with a Master’s level foundation in writing and communi...