The homebuilding industry has grown significantly on soaring demand for new homes over the past year. The work-from-home trend motivated millennials to buy single-family dwellings, expediting their shift from renting to owning. Furthermore, with mortgage rates falling to record lows, many homebuyers have secured homes at attractive costs.
The U.S. housing market broke records in 2021, delivering one of its strongest performances in 15 years. However, mortgage rates have been inching up after falling to an all-time low last year. And the Fed has indicated that a hike in interest rates is imminent, perhaps as early as March. According to Bankrate chief financial analyst Greg McBride, mortgage rates are expected to climb up to 3.75% this year before falling back to 3.5% by the end of 2022. He said, “3.5 percent is higher than where we are now, but it’s still lower than anything we’d ever seen before the pandemic. So, it’s still going to be an environment of low and attractive mortgage rates.” Also, Realtor.com expects home sales growth of 6.6% in 2022.
