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
Friday January 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.


Stay Connected

Sign up to Access:

Exclusive private listings S.F. Valley market insights VIP events

    Thanks for signing up!
    By signing up you agree to our Terms & Conditions

    More Blog Posts

    To Love
    Friday July 1, 2022

    The splendor of your home begins with its landscaping, especially when it comes to increasing your property value. ...

    Read Full Post
    Tuesday June 21, 2022

    If you’re a parent, buying a home can be a daunting task. There’s so much to think about - from finding the rig...

    Read Full Post
    Monday June 13, 2022

    RealTrends + Tom Ferry The Thousand, as featured in The Wall Street Journal, is an annual, national ranking program...

    Read Full Post
    Wednesday May 18, 2022

    The Agency is always looking for new ways to innovate, adapt to a changing marketplace and elevate our offerings, a...

    Read Full Post
    Friday May 13, 2022

    Offering top-tier schools, ample space, precious privacy and close proximity to retail, restaurants, major studios ...

    Read Full Post
    Monday March 21, 2022

    In 2021, several of Los Angeles' residential real estate agents had their finest year ever. Interest rates were low...

    Read Full Post