The low inventory of homes on the market in the Golden Isles will continue to make it a seller’s market through much of 2022.
Lenders, such as Mark North, vice president/regional sales manager for United Community Mortgage Services, said there is “an incredible amount of uncertainty” coming into the new year but the overall expectation is for fixed mortgage rates to remain in the mid-to-upper 3% range.
Rates are expected to raise about .25% higher, but fluctuate throughout the year, he said.
“Keep in mind that mortgage rates are not directly correlated to Federal Reserve rate hikes,” he said. “Mortgage rates react positively to efforts to tame inflation which will be the Federal Reserve’s focus in 2022.”
The current rate for a $250,000 home is 20% down with a credit score of 720 or above for a 30-year fixed rate of 3.375% or a 15-year fixed rate of 2.65%, he said. The demand for homes in the Golden Isles will remain strong, even if rates rise, he said.
“Housing demand and the shortage of new construction and existing homes will override practically any increase in rates,” North said. “Sales will be more impacted by prices than rates.”
The fixed rates will help home buyers, he said.
“There is good news for buyers in 2022 with regards to better fixed rates in that conforming loan amounts will increase from $548,250 to $647,200,” he said. “Conforming loans traditionally offer lower fixed rates, lower down payment options and lower credit scores required for approval so this will expand buying power for consumers.”
Luckily for local consumers, the low inventory of available housing has no impact on mortgage rates.
“Rates are a result of many factors, 10-year Treasury demand, the Federal Reserve reaction to inflation and the ongoing concern over Omicron virus,” he said.
If there is another spike in COVID-19 cases, North said it could cause interest rates to decrease because of the uncertainty surrounding the impacts.
As for whether it’s a good time to buy a home, North said there are a number of factors to consider.
“That depends on the urgency of the buyer. If the need is due to a relocation, then there is not much choice,” he said. “Otherwise, the market and prices remain hot, especially in the Southeast U.S., so buyers should expect to pay at or above values into 2022.”
Zaida Clay Harris, associate broker and managing partner for Signature Properties Group, predicted 2022 will continue to be a seller’s market through much of the year.
“As long as the inventory is low it will continue to be a seller’s market,” she said, “It is being predicted that the market will remain strong through the late summer and early fall.”
Harris said there is an expectation that home values locally will experience a slowdown in price increases.
“Interest rates will start rising in the late summer/early fall and this will affect the amount of home a first-time home buyer will be able to afford,” she said.
People who are buying homes in the Golden Isles aren’t always moving into them immediately.
“Most of my buyers are people who are nearing retirement age and are buying a home that they can use as a vacation home now and then convert to a full-time residence in a few years,” Harris said. “I have also worked with several buyers who have moved to the area from Atlanta to get away from the big city.”
Prices show no signs of leveling off anytime soon.
“We should see home prices continue to rise in 2022 but not as much as 2020 and 2021,” Harris said. “The higher end market, $1 million-plus, should continue to be strong despite the interest rate rise. The expected rise in interest rates will impact first-time home buyers and those on a budget.”