The 2021 housing market was one for the history books. After three consecutive months of increases recently, existing home sales are on pace to hit their highest level in 15 years, with an estimated 6 million homes sold in 2021 according to the National Association of REALTORS®. Sales prices reached new heights, inventory hit rock bottom, and homes sold in record time, often for well above asking price. Mortgage rates, which began the year at historic lows, remain attractive but have increased since we began the new year.
If you’re in the market for a home and haven’t locked in a mortgage rate yet, that home just got more expensive. The average rate on the popular 30-year mortgage hit 3.64% (conforming rate) on Monday January 10th, after rising sharply last week, according to Mortgage News Daily. On Friday January 7th, the rate was 3.5%, and last Monday January 3rd it was 3.29%. The real jump happened midweek, when the Federal Reserve announced it would offload mortgage-backed bonds from its balance sheet sooner than expected.
The current jump in rates will certainly affect the purchasing power of many buyers at certain price points. With the new year also came new changes to the conforming loan limits which in San Diego County increased to $879,750. If you are actively searching for a new home to purchase, I recommend you contact your local lender to see how these changes have impacted your purchasing power and approval.
Looking ahead, experts anticipate many of the housing market trends of 2021 will continue in 2022, albeit at a more moderate level. Strong buyer demand and inventory shortages are likely to persist over the next year. Home sales are projected to remain strong but will be tempered by the limited supply of homes, higher sales prices, and rising interest rates....with the Federal Reserve planning multiple rate hikes in the new year. Price growth is expected to slow somewhat as a result, but affordability will likely remain a top constraint for some homebuyers. Those homeowners who choose to sell in the coming months can expect to see plenty of buyer activity due to pent-up demand during the pandemic.
I continue to take many calls from Sellers and Buyers in this marketplace and always welcome the opportunity to reconnect with you or speak with your referrals.
If you’re in the market for a home and haven’t locked in a mortgage rate yet, that home just got more expensive. The average rate on the popular 30-year mortgage hit 3.64% (conforming rate) on Monday January 10th, after rising sharply last week, according to Mortgage News Daily. On Friday January 7th, the rate was 3.5%, and last Monday January 3rd it was 3.29%. The real jump happened midweek, when the Federal Reserve announced it would offload mortgage-backed bonds from its balance sheet sooner than expected.
The current jump in rates will certainly affect the purchasing power of many buyers at certain price points. With the new year also came new changes to the conforming loan limits which in San Diego County increased to $879,750. If you are actively searching for a new home to purchase, I recommend you contact your local lender to see how these changes have impacted your purchasing power and approval.
Looking ahead, experts anticipate many of the housing market trends of 2021 will continue in 2022, albeit at a more moderate level. Strong buyer demand and inventory shortages are likely to persist over the next year. Home sales are projected to remain strong but will be tempered by the limited supply of homes, higher sales prices, and rising interest rates....with the Federal Reserve planning multiple rate hikes in the new year. Price growth is expected to slow somewhat as a result, but affordability will likely remain a top constraint for some homebuyers. Those homeowners who choose to sell in the coming months can expect to see plenty of buyer activity due to pent-up demand during the pandemic.
I continue to take many calls from Sellers and Buyers in this marketplace and always welcome the opportunity to reconnect with you or speak with your referrals.
Ben Anderson
License DRE# 01369906
Broker DRE# 01767484
1111 Prospect Street, Suite 100, La Jolla, California 92037
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1111 Prospect Street, Suite 100, La Jolla, California 92037
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