Q2 2022 Research and Insights

Macroeconomic Outlook

  • Economic outlook deteriorating with output declining in Q1 2022 and on track to decline in the third quarter as well.
  • Recession risks on the rise.
  • Labor market remains strong with unemployment rate at close to 50-year low.
  • Inflation is impairing consumer confidence and food and energy costs could continue to worsen.

Housing & Mortgage Market Outlook

  • Rates up 2.7% over the last year; had the largest one year increase this century.
  • Housing market slowing with softer purchase applications, declining home sales and housing starts.
  • Refinances have almost dried up.
  • Home prices remain high as the housing inventory shortage continues.

Distress Supply, Delinquencies & Foreclosures

  • Mortgages in forbearances low; loans which exited forbearance performing or have paid off.
  • Foreclosures tick up slightly.
  • Distress sales at low levels as compared to the historical average.
  • Federal Housing Administration (FHA) Early Payment Defaults (EPDs) performance is deteriorating.

Quarterly Forecast Released on July 20, 2022

  • The 30-year fixed-rate mortgage (FRM) is expected to average 5% in 2022 and 5.1% in 2023. In 2021, the 30-year FRM averaged 3%.
  • House price growth is expected to average 12.8% in 2022, slowing down to 4% in 2023. House price growth was 17.8% in 2021.
  • Home sales are expected to be $6 million in 2022, decreasing to $5.4 million in 2023. Home sales were $6.9 million in 2021.
  • Home purchase mortgage volumes are expected to increase to $2 trillion in 2022 slowing to $1.9 trillion in 2023. Purchase originations were $2 trillion in 2021.
  • Refinance originations are expected to decline to $0.9 trillion in 2022, slowing further down to $0.5 trillion in 2023. Refinance originations were $2.8 trillion in 2021.
  • Overall, annual mortgage origination levels are expected to be $2.8 trillion in 2022, and $2.3 trillion in 2023, down from $4.8 trillion in 2021.




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