Buying a home in 2021 was challenging. A housing shortage and rising prices created fierce competition with frequent bidding wars. The fears of an unstable economy and the pandemic’s uncertainty still cause many to question homeownership’s future in 2022. In this blog post, we’ll break down what to expect this year regarding the housing market and mortgage trends. 

Mortgage Rates

Mortgage rates have been historically low but are expected to rise slightly in the 2022 housing market. While forecasters don’t predict huge increases, an uptick in rates is expected. The Mortgage Bankers Association® predicts rates will hit 4% by the end of 2022. Fannie Mae® expects the 30-year fixed rate to average 3.4% by year-end. Freddie Mac® and the National Association of Realtors® also anticipate steady rate increases. Averaging these predictions, the 30-year fixed rate may be 3.33% in the first quarter and 3.7% in the fourth quarter.

Home Prices and Affordability 

Affordable housing significantly contributes to the economy. Homeownership builds generational wealth and creates tax revenue. However, high prices and low inventory have edged out many buyers. There may be relief on the horizon. The Mortgage Bankers Association expects home prices to drop later in the year. The median price of existing homes is projected to post to a 15.3% year-over-year gain to $362,000 in the first quarter of 2022 but drop to $352,000 by year-end, a 2.5% year-over-year decrease.

Housing Market Crash Unlikely 

Experts doubt a housing market crash like in 2008. Unlike then, current home price appreciation results from supply and demand, not bad lending practices. We now see stricter lending rules and a housing shortage. The economy is recovering remarkably, and more homes should become available, evening out the market in 2022.

Streamlined Mortgage Experience 

Technology has simplified the home buying process with hybrid e-closings. Electronic mortgage closings will become more common and accessible to borrowers and lenders. This process eliminates steps like copying and shipping, allowing borrowers to sign much of their paperwork digitally. It reduces in-person closing time to 15 minutes or less, saving everyone valuable time. Silverton Mortgage closed 1,000 loans digitally since its beta launch in April 2021 and aims to further simplify the mortgage process.

Having Options is Key 

With a housing shortage, stringent lending standards, and rising interest rates, having choices will be crucial in the 2022 housing market. Silverton Mortgage offers various loan options to make homeownership possible for many Americans. With Silverton Secure, borrowers can send their loan through underwriting before making an offer, giving sellers peace of mind. FHA, VA, and USDA loans can help first-time homeowners, especially millennials dominate the market. New construction loans will be vital as homebuilders ramp up supplies. Speaking with a trusted mortgage professional who reviews your unique circumstances and explains best options can save money and headaches.

The Bottom Line 

Homeownership remains an accessible dream. While market shifts may occur this year, experts don’t foresee them as crippling to the average mortgage seeker. Rates are expected to remain reasonable, and the housing shortage’s end is in sight. The market is in a much better place than in 2008. We anticipate the closing process will become easier, and loan programs designed to help people achieve homeownership keep the dream alive for another year.

Contact Us

Do you have questions about the mortgage process and what homeownership could look like for you? Contact a Silverton Mortgage professional today, and let us help! 

* Silverton Mortgage is authorized to originate [FHA, VA, USDA] loans, but it is not an agent of, or affiliated with, the U.S. Government.