How high will mortgage rates go in 2022?

May 16, 2022

How high will mortgage rates go in 2022?

Let’s talk about interest rates.

Mortgage rates to be specific. These things are going up fast!

And I want to talk about where they are going to end up. Some economists say, “It could end up at 9%!” This April, all of a sudden the mortgage rate is at 5%, which I think is insane!

Let’s take a look at these articles to see what several big figures in the industry are saying about the topic.

Reality vs. Prediction

Freddie Mac released the graph of this April 14. And, if we look at what Bankrate says about the mortgage rate increase, “the Federal Reserve is looking back to that playbook from 1994, which was to raise rates hard and fast. And I think at the end of the year we could easily see mortgage rates around the 7% mark.”

I think that is crazy! But it’s true.

In 1994, mortgage rates increased from 7% to slightly over 9%, and that jump in interest is crazy to me.

And if we look at the reality we see today, versus the forecasts in mortgage rates from earlier this year, it is so unbelievable that the pros can’t even guess it correctly. If these economists can’t predict it, what more for us simple real estate agents, right?

In March, Forbes released their Mortgage Rates Forecast for March 2022, and this is what some economy pros said:

Even Robert Frick, the corporate economist for Navy Federal Credit Union, believed that the 10-year Treasury yield and all things considered, mortgage rates will increase slightly, but will likely remain below 3.5%. And those forecasts have turned up far from reality just a month later.

Here’s the thing - nobody knows where the rates are going to end up.

Why do mortgage rates increase during inflation?

The simple answer is that the Federal Reserve raises rates during inflation to lessen the desire to spend. If the demand is high, prices will increase causing inflation, and to keep that in check, the Fed raises interest rates to lower the demand, and eventually, to lower prices.

This creates some serious issues for us in real estate. In fact, in a housing market update by Redfin, the demand for housing slipped, pushing sellers to drop their asking prices.

Of course, the demand will slip if you raise the housing rates! Showing Time provides a graph that shows a dip in the number of recent house viewings.

There’s even been an observed decrease in mortgage applications and refinances lately.

This has a lot of people asking, “so what’s gonna happen now that interest rates are going up?”

The point is this: We don’t know where interest rates are gonna end up. They can end up around 6, or 7, or around 8, although, I don’t think they’ll go up that high. 

But here’s what’s [probably] going to happen.

Once they do reach the max, they’re gonna come back down. And that’s gonna depend on a lot of things that are out of our control.

So, if you’re in the process of buying a home right now, make sure to lock in the rate.

If you’re a real estate agent out there, let your clients know that the rates may go up so it’s a good idea to start buying homes right now.

But don’t panic. The demand for homes is not going to go down.

Some people are indeed moving out of California and New York to go to Miami and different parts of Florida, but even in those states, we’re still hearing a lot of multiple offers.

So, the demand is super high. But here’s what I think.

I think as inflation decreases, if the war between Russia and Ukraine ends soon, that will help with inflation. Although, I don’t know.

Right now, mortgage rates are at 5%, and I don’t think it is unreasonable to predict the rate will go up to 6 by the end of the year. However, I am not an economist. And even the pros find it hard to predict right. A lot of it depends on things that are outside our control.

The Bottom Line

All I can say is, yes, interest rates are going to continue to creep up. The best you can do is just pay attention to everything that’s happening but don’t believe everything in the news so much. There’s a lot of fear shown in the media right now saying, “Oh no! There’s a collapse. What’s going to happen to the market now?”


There’s a large demand for homes right now. So, focus on what you can control, like your emotions and how you react to everything. Keep an ear out for current events and make calm and reasonable decisions once you see the data.