Mortgage Rates Expected to Rise in 2022

Posted by Leo Clark. on Saturday, December 18th, 2021 at 7:11pm.

2022 Mortgage RatesIf you’re planning to finance a new home or refinance in 2022, the new year could be ushering in higher mortgage rates. While the Federal Reserve doesn’t exactly set mortgage rates, its actions are in some way tied to rates.

Due to the fallout from COVID-19 and its impact on the economy, almost a year ago the Fed started buying up a certain type of bond that helped rates go low and stay low. Those rates can’t stay low forever, though.

Recently the Fed announced it plans to begin tapering off the monthly purchase of mortgage-backed securities in 2022. That’s expected to begin in January, with an end to it in the coming months.

Previously the plan was to stop in the middle of the year, but now that plan has been accelerated. In turn, it means mortgage rates will probably go up.

Something similar happened in 2013. If rates follow the same pattern as they did before, that could mean rates approaching four-percent by late 2022.

For now, there’s a lot up in the air. The Fed’s future actions as we move into 2022 will likely be determined, at least in part, by the ongoing virus and how the nation’s economy recovers from it.

The news means homeowners thinking about refinancing should probably act fast. If you want to take advantage of low, low mortgage rates you’ll want to do so while they still exist.

It’s not a given that rates will increase, that’s just a forecast. However, what happens with the virus and the economy in the coming months is going to be an indicator of what happens with mortgage rates.

As for now, though, it looks like mortgage rates will be on the rise. Because they are currently so low, it’s likely they don’t really have anywhere else to go but up from here.



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