Quarterly Research Package and Forecast: Q1 2022

Top Market Themes for April 2022

Macroeconomic Outlook

• COVID-19 cases subside, but risks remain.
• Economic growth to moderate on waning stimulus and geopolitical uncertainty.
• Labor market continues to remain strong.
• Inflation hits 40 year high and shows no signs of a slowdown; will likely remain elevated.

Housing and Mortgage Outlook

• Rates up 1.5% over the last one year; had the largest one year increase this century.
• Refinance volumes set to decline on rising rates.
• Purchase demand remains stable as we enter spring home buying season.
• Home prices remain high as the housing inventory shortage continues.

Delinquencies and Foreclosures

• Delinquencies remain low.
• Forbearance and other policies have eliminated foreclosures.

First Quarter Forecast Released on April 18, 2022

• The 30-year fixed-rate mortgage (FRM) is expected to average 4.6 percent in 2022 and 5.0 percent in 2023. In 2021, the 30-year FRM averaged 3.0 percent.   
• House price growth is expected to average 10.4 percent in 2022, slowing to 5.0 percent in 2023. House price growth was 17.8 percent in 2021.
• Home sales are expected to be 6.7 million in 2022, decreasing to 6.6 million in 2023. Home sales were 6.9 million in 2021.
• Home purchase mortgage originations are expected to increase to $2.1 trillion in 2022 and $2.2 trillion in 2023. Originations were $1.9 trillion in 2021.
• Refinance originations are expected to continue to soften, declining to $960 billion in 2022 and $535 billion in 2023. Originations were $2.8 trillion in 2021.  
• Overall, annual mortgage origination levels are expected to be $3.1 trillion in 2022 and $2.8 trillion 2023, down from $4.8 trillion in 2021.