U.S. home prices roared almost 20% higher in the past year, giving families who own properties a major boost to their finances during the pandemic.
That leaves the market with “two main questions,” according to the Neuberger team, namely, how much mortgage bond supply others will need to absorb as the Fed shrinks its near $8.8 trillion balance sheet. Also, what happens to home price appreciation and refinancing activity if interest rates rise as much as expected?Why housing’s not like 2008 After the 2008 financial crisis, the government’s prominence in the U.S.
Now, forbearance rates on all home mortgages, even those held by banks, have sharply declined from their pandemic peak, recently pegged at a low 1.7% in November , on the back of higher wages and low unemployment. Mortgage experts say the dynamic could help home prices continue to rise at a more normalized rate in 2022, even if 30-year mortgage rates rise and properties become harder for families to afford.