Source: MPA Mag —
How would you sum up the year in a paragraph, or even in one sentence? And what’s your outlook for 2023? How will high rates impact your business?
These are just a few of the questions Mortgage Professional America (MPA) posed to mortgage experts now that the year is drawing to a close.
What is undeniably true is that 2022 will go down as one of the most tumultuous years in recent history, not just for the global economy but for the US housing market (let’s forego the well-worn euphemism, ‘challenging’).
Few saw it coming, though. The end of the COVID pandemic brought renewed optimism for the world’s economy, even though the mortgage industry enjoyed a boom during this period, thanks to record low rates and sky-high home prices.
However, 2022 was also a sobering reminder that you cannot make surefire predictions about anything – the war in Ukraine made sure of that.
As for next year, despite the upbeat message coming from lenders and mortgage companies about the bloated size of home equity and the rock-solid belief that ‘people will always need a home’, the sad fact is neither borrowers nor lenders will be able to dictate the narrative.
There’s sufficient evidence to show that high interest rates are having a detrimental impact on the housing market. Elon Musk – admittedly a hugely controversial figure – tweeted for the umpteenth time this week that the Fed’s rate increases “might go down in history as the most damaging ever”.
And if economic conditions worsen – say if the war in Ukraine drags on throughout next year and beyond, or if there is a new and unforeseen global event – the US and others will be staring down the barrel of something far worse than a minor recession.