New mortgage purchases will rise to 1.61 trillion in 2021, eclipsing the previous all-time high of $1.51 trillion in 2005, according to the Mortgage Bankers Association’s (MBA) 2022 housing market and mortgage rate predictions.
It predicted refinance volume to drop slightly, to $2.63 trillion, but still remain the third-highest year ever.
Total mortgage originations are expected to drop to $2.6 trillion in 2022, and more housing activity will be centered on home purchases, rather than refinances. Refinance originations will decrease to $870 billion in volume, the MBA said.
If you are interested in refinancing your mortgage while interest rates remain at record lows, visit Credible to find your personalized mortgage rate without affecting your credit score.
How will an economic rebound affect mortgage rates in 2022?
The MBA predicts that after a decline of about 2.3% to the gross domestic product in 2020, the economy is expected to rebound with a growth rate of 5.5% in 2021. The economy is expected to continue growing at a rate of 4% in 2022 while the employment rate drops to 3.5%.
As the economy continues to strengthen, mortgage rates are expected to rise slowly and reach 4% annual percentage rate by December 2022. The housing market will slow as higher mortgage rates emerge, the MBA said, and home price appreciation will moderate to just 5.1% annually.
If you want to take advantage of low rates, consider refinancing your mortgage to reduce your monthly mortgage payment. Visit Credible to compare multiple mortgage lenders at once and choose the one that has the best interest rate for you.
Benefits of a mortgage refinance
The Federal Reserve has indicated it could begin raising rates in 2022 up to three times and has begun to taper its economic stimulus. Homeowners who choose to refinance their mortgage this year before interest rates rise could benefit for several reasons:
Lowers monthly payments
The current average 30-year mortgage rate rests at just above 3%, according to the latest data from Freddie Mac. Many homeowners could lower their monthly mortgage payments by refinancing their home loans before the Fed begins to raise rates in 2022.
Pull cash out of home
Home prices surged at nearly 20% annually in 2021, giving homeowners access to unprecedented levels of equity in their homes. Homeowners can tap into the funds through a cash-out refinance before the year brings higher rates.
If you are interested in refinancing your current mortgage with low mortgage rates, contact Credible to speak to a home loan expert and get your questions answered.
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