A look at possible real estate trends in 2022

Of course, just because you call yourself a real estate technology company, also known as “prop-tech,” doesn’t mean you always get it right. Zillow shut down its iBuyer division, Zillow Offers, at the beginning of November, acknowledging a potential loss of hundreds of millions of dollars, and said it was cutting its workforce by 25%.

Trend 2: Interest rates are rising (this time, for real).

Since the Great Recession, mortgage industry observers and economists have annually foretold the rising of interest rates. In 2010, the 30-year mortgage interest rates were around 4.69% but fell to the mid-3% range by 2012, according to Rocket Mortgage and mostly stayed there. At the end of 2018 and the beginning of 2019, mortgage rates hit 5.34% for a brief moment in time.

But they quickly declined, and in January 2020, mortgage rates were back at around 3.7%. And, then COVID-19 hit, the Federal Reserve Bank lowered the federal funds rate to between 0 to 0.25%, and mortgage interest rates dropped below 3%.

What happens now? Lawrence Yun, chief economist of the National Association of Realtors and Mike Fratantoni, chief economist of the Mortgage Bankers Association, agree that interest rates are scheduled to rise. And, Jerome Powell’s recent pronouncement that the Federal Reserve will look to raise the federal funds rate three times in 2022, while phasing out its bond-buying program, make it likely that mortgage rates will rise.