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Mid-Year Check In, How Will 2022 Shake Out for the Mortgage Industry?

Mid-Year Check In, How Will 2022 Shake Out for the Mortgage Industry?

We at Mortgage Maestro Group and many other businesses working in real estate have been beating the same drum over the past few years, and with good reason. The market has been in a steady upswing for a while now, with demand outpacing supply and prices rising steadily. We have talked about a lot of the reasons why this has happened, but now seems like a fitting time to flip the script a bit. Several important metrics are now indicating that the market is beginning to cool off, which should not be unexpected considering how far we have come. Here are a few clues to pay attention to as we move forward, and some opportunities to look for.


There are a few different ways to track inventory in the housing market, or put simply: how many homes are available nationwide? Throughout the COVID-19 pandemic, inventory was generally outpaced by the demand for homes, leading to increased competition and higher prices in the market. There are a few clues that this may be changing now. recently reported that active listings were up 13% in May from last year. There are a lot of different reasons this could be happening. For example, with the market reaching such great heights, many homeowners may be looking to sell at what they believe is a peak. More active listings also means that homes are not being snatched up as quickly as they were 10 or 12 months ago.


In addition to clues from property inventory metrics, there is also plenty of data telling us that demand may be slowing. News outlets are now reporting decreases year-over-year in online searches for terms like “mortgage” and “real estate sale”. More concrete measures of demand show a similar trend. In June, CNN reported a 16% decrease in mortgage applications from last year. Again, there could be several ways to explain this. During the pandemic, there was a rush by many people living in urban areas to purchase homes in new areas as they shifted to working remotely. We may now be riding down the crest of that wave of demand from buyers.


As with any significant changes in the market, there are going to be opportunities to take advantage of. With demand dropping, buyers now have more leverage in key areas like negotiating on price, fixing inspection items, not paying an appraisal gap, etc. During the height of the market, in the last few years, a lot of these negotiations were simply not on the table due to the amount of competition. As we see demand cool off, it is a great time for first-time buyers to take advantage of new incentives from the Federal Housing Administration and pilot programs being rolled out by Fannie Mae and Freddie Mac. While home buyers are gaining leverage lately, rents are continuing to rise. Many of our customers are now looking at turning their home purchases into passive income, buying a multifamily property and renting out a unit. This type of “house hacking” is a great way to take advantage of recent changes. Have questions? Contact our team today! 303-779-0591

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