It’s a very strange time for the country in general, the mortgage industry and real estate are not without their challenges as well. Some are directly linked to the other, some much more convoluted in their connection.
It’s not hard to see that rising inflation impacts everyone. If things cost more, then they cost more. Some people are fortunate enough to stay ahead of inflation with their income, others will have to do with less. The real issues aren’t just that things cost more, as much as the stress that is caused when entire budgets are blown, or opportunities are eliminated because of it. The emotional impact can be very real as rising prices take their toll.
We are seeing inflation far exceed FED targets and they have pushed their projections of inflation from “transitory” firmly into “reality” as it will not be temporary and certainly will not reverse itself when people go back to work after corona virus. Inflation is very real and the supply chain isn’t just about people just going back to work. Why? Because in August, more than four million workers just quit their jobs!
Looking into 2022 our industry must prepare for life with higher interest rates and tight supply. Not just in housing inventory, but with the ability to improve existing units or build new units. If you’re not sure what I mean, just try to buy appliances or paint! If you can find what you want, look at the cost! This reality may keep the market supply tight, and has interest rate rise, we lose purchasing power in our monthly payments.
2022 will still be a good year for purchase business, refinances will retreat and the pressure in the housing market will likely continue!