At the end of 2021, the 30-year mortgage rate average was under 3.4%. At the end of January 2022 mortgage rates climbed to 3.8% for the average 30-year fixed mortgage. This is a significant increase for just a one-month timeframe. And it comes as a little bit of sticker shock to some buyers seeing that rates hovered pretty low for quite some time.

The first month of 2022 brought a few more challenges to homebuyersMortgage Rates Jumped in January -  Should You Still Buy?

Not only did mortgage rates see a small jump but home prices continue to increase as well while inventory remained very low. These three driving factors combined together caused January to be a rough purchasing a month. Those who saw the most challenges were first-time buyers on a lower purchasing budget.

2021 did bring significant increases in home prices but with the interest rates for mortgages remaining low, it allowed buyers to afford more homes than they thought they could. Today’s mortgage rates are still pretty good compared to the past, but they are closing that gap between being able to afford higher home prices.

Are mortgage rates expected to continue to rise?

Some predict that mortgage rates will rise even higher as we continue on into 2022. Many are hopeful that rates will not rapidly increase over the coming months in the way which they quickly did over the month of January.

The Mortgage Bankers Association predicted in 2021 that 30 year fixed rate mortgages would increase to 4% by the end of this year. But based on the significant increase from January alone it seems like rates could exceed 4% within the year.

It is good to know that the Federal Reserve has reported it plans to raise its rates in 2022. The Federal Reserve does not set mortgage rates or consumer interest rates but their actions do greatly influence mortgage rates and have helped to cause interest rate increases.

Does the rise in mortgage rates mean you should give up on buying a home in 2022?

Even though there was a significant increase in the average mortgage rate just in January alone this does not necessarily mean that those hoping to purchase a home should give up. Though mortgage rates could very likely end up higher than projected by top real estate professionals they will still remain comparatively low from a recent historical overview perspective.

Some real estate experts even predict that an increase in mortgage interest rates could cause home price increases to slow down. One of the biggest factors to home price increases has been the extreme demand and a much larger number of buyers seeking a very low amount of homes for sale.

If climbing mortgage rates deter some buyers from an interest in purchasing a home this could allow the inflation of home prices to balance out to help make an interest rate hike more reasonable.

One thing hopeful buyers can do is save as much money as possible to put a bigger down payment on the purchase of their home. It is also a good idea to take steps to try and raise your credit score so that you can qualify for the lowest mortgage interest rate possible available at the time of application.

There’s still hope for homebuyers in 2022 to find a home that they truly love. Some are expecting more homes to come to the market in the spring of 2022 and though mortgage rates could be higher it might balance out and make competition just ever so slightly less difficult.


Hi-Lux is one of the most unique real estate companies in California. We provide free flights to all our buyers as commercial pilots to give you the ultimate viewpoint of your new home. When you need to see real estate from the air, trust your next home purchase to the experts at Hi-Lux homes. Not just luxury – a whole new real estate experience!

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