Experts Projections on Mortgage Interest Rates for 2022 Now

Will Mortgage Interest Rates Go Up in 2022?

How will the increase in Mortgage Interest Rates in Metro Detroit MI affect home affordability?

Mortgage Interest Rates is one of several factors that impact how much you can afford if you’re buying a home in Metro Detroit MI. When rates are low, they help you get more house for your money. Within the last year, mortgage rates have hit the lowest point ever recorded, and they’ve hovered in the historic-low territory. But even over the past few weeks, rates have started to rise. This past week, the average 30-year fixed rate was 3.14%.

What does this mean if you’re thinking about making a move? Waiting until next year will cost you more in the long run. Here’s a look at what several experts project for mortgage rates going into 2022.

Freddie Mac:

“The average 30-year fixed-rate mortgage (FRM) is expected to be 3.0 percent in 2021 and 3.5 percent in 2022.”

Doug Duncan, Senior VP & Chief Economist, Fannie Mae:

“Right now, we forecast mortgage rates to average 3.3 percent in 2022, which, though slightly higher than 2020 and 2021, by historical standards remains extremely low and supportive of mortgage demand and affordability.” 

First American:

“Consensus forecasts predict that mortgage rates will hit 3.2 percent by the end of the year, and 3.7 percent by the end of 2022.”

If rates rise even a half-point percentage over the next year, it will impact what you pay each month over the life of your loan – and that can really add up. So, the reality is, as prices and mortgage rates rise, it will cost more to purchase a home.

As you can see from the quotes above, industry experts project rates will rise in the months ahead. Here’s a table that compares other expert views and gives an average of those projections: Whether you’re thinking about buying your first home, moving up to your dream home, or downsizing because your needs have changed, purchasing before mortgage rates rise even higher will help you take advantage of today’s homebuying affordability. That could be just the game-changer you need to achieve your homeownership goals.

Buyer’s Purchasing Power

Unfortunately, as interest rates go up so will the payment.  This will affect the purchasing power of buyers moving into 2022.  As buyers work through the mortgage process, the increase in mortgage payment will affect their debt to income and how much they can afford for their mortgage approval level.  This will slow down the market in certain price points and could eliminate the bidding wars we’ve seen since 2020. I’m watching closely how this is going to affect home pricesmoving forward in 2022. Follow our blog post or sign up for our Weekly Newsletter.