2022 Mortgage Trends

With the emergence of the Omicron variant taking the world by storm and the residual effects of the previous COVID-19 waves, everyone’s wondering—what’s the housing market going to look like this year? In the previous couple of years, mortgage rates have dropped considerably due to the catatonic effects of the pandemic on Canada’s economy (and the global economy as a whole). This year, rate trends are looking upwards.

In 2021, we saw unprecedented drops in inventory of properties for sale. The year saw record lows four times last year, with inventory falling below two month’s worth of supply. This supply issue has impacted housing prices, skyrocketing them throughout the end of the year. Still, the housing market is recovering from the effects of the pandemic slowly, so mortgage trends for the new year are predicted to be less volatile than previous years. Low supplies will continue to hike up home prices this year, however, the rise will be steady and is expected to stay within moderate levels. Some experts predict the number of new homes being built to increase in 2022, despite issues surrounding the supply of material stock, which will hopefully slow down the rate at which home prices accelerate. 

Mortgage interest rates are widely predicted to increase about .5% by the end of the year, just as they did in 2021, as the housing market slowly but surely recovers from the hits taken in the early stages of the pandemic. Most experts believe rates will steadily rise to somewhere between 3.6-4% by the end of the year, which, compared to the rates prevalent in mortgage history, is still impressively low. Buyers will still be able to take advantage of really favourable rates throughout the year.

Buyers should also prepare for a more competitive market this year. As a new demographic of people enter the market as first-time buyers, they will be competing with existing buyers to take advantage of low rates on coveted houses from a smaller-than-usual inventory. Having a clear plan for the kind of property a potential buyer is looking for as well as how they plan to finance it is key to succeeding in the housing market in 2022.