The mortgage market has been robust this year. Low interest rates have created a huge amount of competition for every available property, bringing prices up. The climate for interest rates is now higher at the end of the year than at the beginning, as the Fed has sped up its tapering plan in backing off of mortgage-based securities, and borrowing banks will also be facing rate hikes. All of these have made it a tough market for first-time homebuyers. The main issues they face are: What is the rate? Can I afford it today? Are there properties available within my price range? Things that have been difficult during this year are going to be even more so in 2022, with money becoming more expensive, housing prices looking to go up about 5-6%, and in the ways Covid has changed so many aspects of our lives. Employers have varying policies on whether employees should come back to work in person or continue working remotely, causing a shift to people moving to more affordable places where they can live less expensively and be able to work from home. Cities traditionally known as affordably priced are now seeing an influx of buyers from outside areas bidding on available homes, often pricing locals out of the market. Those with families that need to remain closer to work are having a harder time and longer wait for a new home, as opposed to buyers who can move about more freely without being tied to a certain location for work. On a positive note, if prospective buyers can hold out a little longer and put extra money away for a downpayment, housing prices should come down a bit in the future and more supply will be on the market.

2020 and 2021 have been historically stellar years for the mortgage industry, and it will be interesting to see if that will continue. Treasuries have remained stable over the past two years, especially with the volatility in income, employment, mortgage payments, and the way the government has handled it. The mortgage rates have also stayed within a narrow range but are incrementally moving up as tapering nears. Will the rising rates be more advantageous for some and less so for others? What’s ahead in 2022? Jeff’s guests this week:

– Connie Hernandez from PMA Covina weighs in on 2022 and the market.

– Charles Giscombe of Malibu Funding talks about closing loans at the end of the year.