Some analysts foresee that the spring housing market of 2022 will be one of the most competitive ever. Find out what economists have to say.

MBA Weekly Applications Survey February 9, 2022: Rising Rates Put Damper on Refis

The Mortgage Bankers Association announced Wednesday in its Weekly Mortgage Applications Survey for the week ending February 4th that mortgage interest rates continued to climb last week, snagging momentum for homeowners anxious to refinance before rates surge even higher. 

The Market Composite Index fell by 8.1 percent from the previous week on a seasonally adjusted basis. The unadjusted Refinance Index also fell 7% from the last week, and the refinance share of all mortgage applications decreased to 56.2 percent. The seasonally adjusted Purchase Index dropped 10% from the previous week. 

Home Values Increase Faster In Family-Friendly Neighborhoods

According to a new data report from Zillow Group Inc, home values are increasing faster in communities with the highest population of children under 18. Zillow found that the top 10% of ZIP codes in each county with the highest percentage of children grew by an average of 21.3 percent between October 2020 and October 2021, based on an analysis of 421 counties comprising 71% of the US population. The increase in ZIP codes with the most negligible share of children was only 17.6% during the same period. 

Millennial demand has helped push up home prices in areas with the most children. Competition for homes in these family-friendly areas should intensify in the coming years as more millennials reach the key age of 32, adding to the affordability squeeze,” said Zillow economist Nicole Bachaud.

Zillow: Home Prices Now Set To Spike 16%

More industry experts are now discarding their previous projections for more bullish short-term outlooks. Some analysts predict that the spring housing market of 2022 will be one of the most competitive ever. 

Zillow economists now believe that the forecast is overly conservative. According to their latest projection, home prices go up 16.4% between December 2021 and December 2022. It will be yet another challenging year for homebuyers if it comes to pass. Zillow attributes this spike to the worsening inventory situation. Zillow had only 923,000 properties for sale in the United States in January. This is a decrease of 40.5 percent from the pre-pandemic level in January 2020 and 19.5 percent from January 2021. More buyers may jump into the housing market in the short term to lock in low rates before they spike. On the other hand, higher mortgage rates would strain price growth in the long run. Why? Mortgage rates are rising, and some buyers are being priced out of the market.

Next week’s potential market-moving reports are:

  • Monday, February 14th – No Report   
  • Tuesday, February 15th – Producer Price Index
  • Wednesday, February 16th – NAHB Home Builders’ Index, FOMC Minutes
  • Thursday, February 17th – Initial Jobless Claims, Building Permits, and Housing Starts
  • Friday, February 18th – Existing Home Sales

As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends.  I welcome the opportunity to serve you in any way I possibly can. Please feel free to reach me at (800) 216-1047.