Purchase applications set to grow in 2022, knock on wood

Markets responded with a taper tantrum after more hints of rate hikes in 2022. As a result, mortgage rates increased across all loan types: the 30-year fixed rate mortgage increased 11 basis points to 3.70% while the 15-year mortgage increased 10 basis points to 2.95%.

current outlook:

With many calling for the Fed to hike rates not once, not twice, but up to seven times this year in order to control inflation, markets got a bit volatile last week. Builder sentiment also went down after a four-month positive run. It fell to 83 in January in response to increasing materials costs, which grew 19% over the last month. What could help the situation is a new trade agreement between the U.S. and Canada, one with fewer tariffs on softwood lumber imports. Should these inventory issues be addressed, experts predict a strong purchase market in 2022. In spite of rising rates, the first week of 2022 saw an uptick in purchase applications while refinance applications held steady. FHA and VA purchase applications in particular saw a 9% and 5% uptick respectively. 

Purchase applications set to grow in 2022, knock on wood

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