December tends to be a pretty quiet time in the real estate world, and all eyes are on what the mortgage market will do in the new year. Here’s what you need to know this week during this intermission between holiday breaks.
1. FHFA sets mortgage limits for 2022
The Federal Housing Finance Agency sets new limits each year for the maximum value of loans that can be purchased by Fannie Mae and Freddie Mac. Thanks to soaring home prices during the pandemic, that limit made a record jump heading into the new year: $647,200 for most of the country, and $970,800 in more expensive locales.
2. How FHA and VA borrowers can better compete
The crazy-competitive housing market over the last year-plus let sellers be extra picky when weighing multiple bids. The result is that many buyers who had FHA and VA mortgages struggled to break through, because sellers often see those offers as less certain than cash or a traditional conforming loan. But such borrowers don’t need to be left out in the cold if they have the right strategies in place.
3. Mortgage rates will likely rise in the new year
2021 saw record-low mortgage rates, but those days are likely behind us. Although mortgage interest can fluctuate on the market day to day or week to week, the trend definitely points higher in the months ahead.
4. For now though, a rate reprieve
With the emergence of the COVID omicron variant, markets retreated into uncertainty, giving borrowers another chance to take advantage of low mortgage interest while it lasts.
5. And now, a word from our rate experts
It may be your last chance to give yourself the gift of a refi this winter. Experts in Bankrate’s weekly Rate Trend Index largely expect mortgage interest to remain favorable in the short term.