The last year or so has changed the way we do virtually everything, emphasizing the word virtually. Technology has kept us together, even when we've been apart from how we work, visit, order food, and experience different activities.

One of the silver linings of these developments is the discovery of new conveniences. Whether meeting remotely online via a video chat, or other virtual intention platforms, we can get the same things done without physically being in another place. This trend is especially true for mortgage lending and should continue into the new year, along with other market factors in the rapidly changing home buying and refinancing landscape.

Mortgage Interest Rate Forecasts

The interest rate you will pay on your mortgage is a significant consideration when purchasing or refinancing. While interest rates are expected to increase slightly in 2022 due to a rise in inflation, it should be small. Fannie Mae predicts that the average 30-year fixed rate will be 3.3% in 2022, up slightly from the 3.1% average in 2021.

Although there will be a slight uptick in interest rates, depending on your current mortgage rate, this could still be an excellent opportunity to refinance your home and save on your monthly payment, change your term, or access the cash equity that you've built up over the years.

Refinancing in the New Year

Refinancing may still be a great option, especially if you want to take cash out of your home. Many places across the country have seen significant increases in home value appreciation over the past year. This new equity can be accessed through a refinance, allowing you to make home improvements, pay off high interest-rate debt, and achieve other financial goals.

Home Prices, Inventory, and Demand for 2022

With interest rates still historically low, the demand for home purchases should remain high. Many people now can work from home and millennials are approaching the age where homeownership is becoming a reality. Because of these factors combined with low home inventory in many places, we expect prices will continue to increase but at a slower rate than they did in 2021. As the housing market begins to normalize, the inventory issues and amplified prices should settle down. New home construction and homeowners taking advantage of higher market values should offer more supply to meet this demand.

For over 90 years, the expert staff at Standard Mortgage (NMLS#: 44912) have been helping homebuyers purchase and refinance their homes. Find a loan officer in your area and take advantage of these new and developing trends.