Everyone scraping together the funds to buy a house in 2020 looked on in panic as the markets seemed to defy all expectations.House prices rose higher and higher, even as the world was in peril and many jobs were hanging by a thread.
Those who felt reluctant to jump right in felt more pressured than ever to get involved while the federal funds rate (and therefore mortgage rates) still remained low, eager to snap up houses out of the fear that prices would continue to rise at the same exponential rates.
Fast forward to 2022, and we’re finally seeing some signs that things are changing. The Fed has finally changed its approach by rising rates (up to 0.75% in May 2022), resulting in mortgage rates rising.
The average interest rate for a 20-year mortgage is now 5.4% — relatively low historically, but above the past few years. Mortgages are now more expensive to buyers, which you’d expect to reduce demand.
CoreLogic, a company focused on real estate research, is constantly trying to understand and analyze trends in the housing market. And its most recent report bears good news for struggling first-time buyers, as it’s predicting slower growth.