It is not only gas prices that are rising. Although the war in Ukraine briefly lowered interest rates, other factors are pushing the rates higher. According to the Federal Reserve, a rate hike is imminent.
In January of last year, mortgage experts had predicted that rates would continue to rise from the all-time low of 2.93 percent. They plunged in 2020, but this year, almost everyone worldwide is expecting the rates to increase.
Lawrence Yun, the National Association of Realtors’ chief economist, predicts a temporary drop in home sales after a spectacular year for housing in 2021 and 2020. The association forecasts that home prices will appreciate by 2.8 % in 2022, compared to 14.7% in 2021.
Reasonable Housing to Remain Out of Reach for Many
The COVID pandemic has worsened housing affordability by taking money from Americans’ paychecks and causing a housing shortage. As a countertrend to the crisis, mortgage rates have sunk to record lows, softening the blow for buyers.