Where Are Mortgage Rates Headed in 2022!

Where Are Mortgage Rates Headed in 2022?

There’s never been a truer statement regarding forecasting mortgage rates than the one offered last year by Mark Fleming, Chief Economist at First American. “You know, the fallacy of economic forecasting is:

“Don’t ever try and forecast interest rates and or, more specifically, if you’re a real estate economist mortgage rates, because you will always invariably be wrong.”

Just three months ago housing experts expected rates for the benchmark 30-year fixed-rate mortgage to clock in between 3.1 percent and 3.4 percent by this time. What a difference a few weeks make:

Rates have ticked-up quickly since the beginning of the year, surging near 4.75 percent for the 30-year mortgage and just below 3.9 percent for the 15-year mortgage loan, according to Bankrate’s national survey of lenders.

Unfortunately for prospective buyers and refinancers, this costlier rate climate is probably the new normal, and all markers indicate higher mortgage rates in the weeks and months ahead.

Coming into this year, most experts projected mortgage rates would gradually increase and end 2022 in the high three-percent range. It’s only April, and rates have already blown past those numbers. It is the start of May and markets expect the Federal Reserve to raise rated .50 basis points. The largest increase in two decades.

Freddie Mac announced last week that the 30-year fixed rate mortgage is already at 4.72%. Danielle Hale, Chief Economist at realtor.com, tweeted on March 31, “Continuing on the recent trajectory, would have mortgage rates hitting 5% within a matter of a few months”.