December 7, 2021 – The Home Stretch. For more than a year we have been speculating as to what the post-pandemic world will look like.


Economic Commentary

The Home Stretch. The start of December is officially the home stretch of the year. This year, we hope it is also the home stretch of the pandemic. For more than a year we have been speculating as to what the post-pandemic world will look like. Will COVID disappear or will it be a manageable condition like the flu that we deal with seasonally in the future?  We do know that even if COVID disappears, we will be dealing with the effects for years to come. 

Shortages of homes, workers and supplies will not disappear overnight. And, as long as there are shortages we will likely be dealing with inflation. The economy shut down overnight almost two years ago, but opening the economy back up has been a gradual affair. Not all the effects of COVID have been negative. We have seen advances in the use of technologies and medicines as well. Researchers are studying whether the technology which produced vaccines might actually be applied to producing treatment for cancers.

On the economic side, millions have become first time buyers in the past year and home building continues to escalate. We have the foundation in place to come out of the pandemic even stronger as a country. In addition, employment gains have been strong this year as the economy recovers. Last week’s jobs report showed that 210,000 jobs were added in November — a disappointment. However, the unemployment rate moved down to 4.2% and the labor participation rate increased. In addition, the previous two months of data were revised upward by almost 100,000 jobs. Wage inflation continues to be concerning, as labor shortages continue in several sectors of the economy. 

Weekly Interest Rate Overview

The Markets. Mortgage rates continued to be steady from week-to-week, but were volatile on a daily basis. For the week ending December 2, 30-year rates moved up one tick to 3.11% from 3.10% the week before. In addition, 15-year loans fell to 2.39% and the average for five-year ARMs rose to 2.49%. A year ago, 30-year fixed rates averaged 2.71%, more than .33% lower than today. Attributed to Sam Khater, Chief Economist, Freddie Mac – “Mortgage rates continue to remain stable notwithstanding volatility in the financial markets. The consistency of rates in the face of changes in the economy is primarily due to the evolution of the pandemic, which lingers and continues to pose uncertainty. This low mortgage rate environment offers favorable conditions for refinancing.”  Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Real Estate News

This winter is expected to be unseasonably hot for the housing market. “Compared to other past winter seasons, this winter season’s sales activity will be stronger,” says Lawrence Yun, chief economist of the National Association of REALTORS®. “This winter, there will be more sales compared to pre-pandemic winters going back all the way to 2006.” The momentum from the last few months is expected to continue. From March through October, homes have been selling faster than they traditionally do. “Although there are fewer buyers in the winter months than in the competitive spring and summer period, all signs suggest that housing demand remains high,” says Danielle Hale,®’s chief economist. Housing inventories remain tight. The inventory of unsold homes fell by 12% in October compared to last year, according to NAR data. A limited supply of homes for sale is an ongoing issue for the housing market against continued strong demand among potential home buyers. Homes are selling fast. Eighty-two percent of homes sold in October were on the market for less than a month, according to NAR data. Buyers may feel more rushed ad may try to qualify for historically low mortgage rates ahead of any more rises. NAR is forecasting that rates will increase to 3.50% by the middle of 2022. Home price increases may be leveling off somewhat, too. “The days of fast price gains are over,” Yun says. “There will be a few pockets of the market where bidding wars do occur, but sellers should expect much less than what was occurring the past 12 months. Home prices generally will be higher price compared to one year ago, but maybe a bit lower compared to what occurred in the summer.” Source:®

The Federal Housing Finance Agency (FHFA) announced the maximum conforming loan limits for conventional conforming loans to be acquired by Fannie Mae and Freddie Mac in 2022. In most of the nation, the 2022 maximum conforming loan limit for one-unit properties will be $647,200, an increase from $548,250 in 2021 and the largest one-year increase in history. According to FHFA’s seasonally adjusted, expanded-data HPI, house prices increased 18.05% percent, on average, between the third quarters of 2020 and 2021. Therefore, the baseline maximum conforming loan limit in 2022 will increase by the same percentage as required by the Housing and Economic Recovery Act (HERA). For areas in which 115 percent of the local median home value exceeds the baseline conforming loan limit, the maximum loan limit will be higher than the baseline loan limit. The new ceiling loan limit for one-unit properties in most high-cost areas will be $970,800 — or 150 percent of $647,200. As a result of generally rising home values, the increase in the baseline loan limit and the increase in the ceiling loan limit, the maximum conforming loan limit will be higher in 2022 in all but 4 counties or county equivalents in the U.S. For a map showing the 2022 maximum loan limits across the U.S. click hereSource: FHFA 

Those who have sat on the sidelines over the last few months and held out on selling their homes are increasingly looking to get into the market, a move that could pay off big for buyers and sellers alike. According to a new survey from, homeowners who plan to sell are in an “extremely advantageous” position due to the fact that the market is currently seeing houses receive multiple bids, contingency wavers, and all-cash offers. The survey, which was conducted by HarrisX, a market research and consulting services company, found that among sellers looking to enter the market within the next year 65% expect to do so within the next six months. In addition, 93% of prospective sellers have already taken steps to begin listing their properties, up from 76% this spring. Also, 36% of prospective sellers have begun researching comparable property values in their neighborhood, as well as making repairs or decluttering the property. “The pandemic has delayed plans for many Americans, and homeowners looking to move on to the next stage of life are no exception. Recent survey data suggests the majority of prospective sellers are actively preparing to enter the market this winter,” said George Ratiu, Manager of Economic Research for “Buyers should be ready for high asking prices and offer deadlines as seller expectations of the upcoming market are greater than in the spring, but an increase in new sellers could mean some relief from the inventory crunch. In addition, as more homes have entered the for-sale market, price growth has moderated from the spring’s double-digit levels to a more approachable 8%-9% range.” The survey also found that compared to the spring (15%), nearly two-times as many prospective sellers (33%) have realized they want different home features after spending more time at home. In addition, with more sellers having children at home this winter (65%) than in the spring (43%), family considerations are a top reason behind homeowner decisions to enter the market: 37% of prospective sellers say their home no longer meets their family’s needs and 32% want to move closer to friends and family. Source: DSNews

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