Main Content

Mortgage Rates on the Rise: Expect a Slow Down in Home Appreciation

The Real Deal

Everything Real Estate in the San Fernando Valley
FridayJanuary 14, 2022
Mortgage Rates on the Rise: Expect a Slow Down in Home Appreciation

As of January 13, 2022, mortgage rates have hit their highest point since the start of the pandemic; averaging 3.45% for a 30-year fixed-rate mortgage (“FRM”). Many analysts expect this trend to continue. While it is important to note that rates haven’t increased by a full percentage point over the last year, 0.8% interest on a $750,000 home comes out to an additional $260 per month (assuming 20% down on a 30-year FRM).
As owning a home becomes prohibitively expensive, it is possible that housing prices will decrease to become affordable again. However, most analysts believe this will simply slow the price growth of homes, rather than stop it entirely. While this is unpleasant news, the housing market’s rapid inflation was never expected to last forever.
Mortgage rates are loosely tied to inflation rates, which hit 7% in December 2021 (this is the fastest rise since 1982). Thus, many people are anxiously watching inflation rates as a proxy for whether mortgage rates will go up as well. All-in-all, mortgage rates will increase, price growth on homes will slow, but value will increase so long as there is a shortage of homes relative to potential buyers.
At the Chernov Team we understand that knowledge is power, and knowledge of market conditions is powerful knowledge indeed. At the Chernov Team we know that whoever comes to the table most prepared leaves with the most, and the Chernov Team always leaves the table with the most.

More Blog Posts

To Love
TuesdaySeptember 5, 2023

With its warm climate, natural beauty and irresistible mix of old-world charm and modern convenience, Portugal has ...

Read Full Post
FridayAugust 11, 2023

There’s no better time to give your home some love with a few simple maintenance projects. And no one knows bette...

Read Full Post
WednesdayAugust 2, 2023

Mortgage rates remain a hot topic this summer and one of the key influencers affecting current and upcoming real es...

Read Full Post
FridayJuly 21, 2023

We’re highlighting tax-friendly places to buy property around the globe. After all, who doesn’t love a tax brea...

Read Full Post
ThursdayJuly 13, 2023

Some of the nation’s largest home insurance carriers, such as State Farm and Allstate, have made headlines recent...

Read Full Post