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When Will The Housing Market Slow Down?

Read Time: 3 Minutes January 12, 2022

A Gallup survey in April 2021 of nearly 1,000 people revealed that a majority of Americans believe that right now is a good time to buy a new home.  Despite the rise in home prices, the reality is there are still bidding wars and many homes close just hours after being listed.

Reasons for the continuation of a red-hot housing market include the fact that people are spending more time at home and there is a movement from big cities to smaller towns. The pandemic also created a need for homes with more space and a backyard. Additionally, according to MarketWatch, millennials are now the largest age group in America, and 63% of them plan on buying a home within the next year.

Keys with house keyring on key rack

Home Loan Options in 2022

When buying a home in 2022, first and repeat homebuyers have many tools at their disposal. From down payment assistance to Jumbo loans, lets dive into your home loan options:

Conventional Loans

Loans not guaranteed or insured by the federal government. Most conventional mortgages are “conforming,” meaning they meet the requirements to be sold to Fannie Mae or Freddie Mac. There are no single set of requirements for borrowers, however, conventional loans generally have stricter credit requirements than government-backed loans.

Expanded Government Loans

FHA, VA, and USDA mortgages are government-supported alternatives to conventional financing and are great options for those who want to put less money down or who have lower credit scores. With multiple solutions and flexible guidelines, they are popular for home purchases and refinancing.

Generous Jumbo Loans

Some home purchases require maximum borrowing power. Jumbo mortgage loans give you all you need to enjoy big real estate opportunities.

How are 15-Year Fixed Mortgage Rates Performing?

The benchmark 15-year fixed mortgage rate recently matched 10-Year Rate Lows. Freddie Mac has been tracking 15-year fixed rate mortgages since 1991.

How about 30-Year Fixed Mortgage Rates?

While noting that 30-Year Fixed Mortgage Rates currently remain under 3%  Freddie Mac added, “Mortgage rates have remained under three percent for three consecutive weeks. Consumer income and spending are picking up, which is leading to an acceleration in economic growth. The combination of low and stable rates, coupled with an improving economy, is good for homebuyers.”

FHA Home Loan

The FHA also offers great refinancing options, whether you’re an existing FHA borrower or not. An FHA streamline refinance is for existing FHA loan borrowers to capitalize on low rates by refinancing quickly and efficiently.  It has reduced credit and underwriting requirements, no income or employment verification, and no appraisal needed. Closing costs are not included in the loan amount but may be offset by lender credits that are offered with this popular program.

Eligibility requirements of an FHA streamline refinance:

  • You are refinancing your primary residence.
  • You have made your mortgage payments on time for the last six months.
  • It has been at least six months since the first payment due date of your current FHA loan.
  • At least 210 days have passed since the closing date of your current FHA loan.
  • The refinance must result in a demonstrated financial net tangible benefit (NTB) to you, such as a lower payment or shorter loan term.

Should You Refinance? Here’s Why

Rates are still considered historically low, however, Freddie Mac recently warned of mortgage rate increases. “There is a potential headwind that could slow housing market activity; higher mortgage interest rates could dampen demand and cool off the single-family housing market. We forecast that mortgage rates will continue to rise through the end of next year.”

Today’s market reflects some of the lowest refinancing rates since these numbers have been tracked. Refinancing now may lower your mortgage rate and thereby reduce your monthly mortgage payment. Changing your loan type and term or going from an ARM to fixed payments could also save you thousands of dollars over the term of your loan. Finally, a refinance could shorten the term of your mortgage and/or allow you to pay it off sooner.

Ready to Buy or Refinance?

Apply for your Home Loan Today


Learn more in our other educational series.

We’ve assembled a treasure trove of jargon-free information to demystify home-financing and arm you with valuable insights and actionable options.

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