Connect with us

5 predictions for the 2022 housing market

According to CoreLogic’s Frank Nothaft, next year should be a strong year for housing. Here are his 5 predictions for the 2022 housing market.
The post 5 predictions for the 2022 housing market appeared first on HousingWire.



This article is part of our HousingWire 2022 forecast series. After the series wraps, join us on February 8 for the HW+ Virtual 2022 Forecast Event. Bringing together some of the top economists and researchers in housing, the event will provide an in-depth look at the top predictions for this year, along with a roundtable discussion on how these insights apply to your business. The event is exclusively for HW+ members, and you can go here to register.

2021 was an extraordinary year for the housing market: mortgage rates at an all-time low, record high annual growth in single-family prices and rents, lowest foreclosure rates in a generation and the largest number of home sales in 15 years. Sellers saw a market where their homes sold quickly and often above list price as multiple buyers competed to have the winning bid. 

Interest rates on 30-year fixed-rate loans averaged 2.96% in 2021, a record low annual average, and are expected to rise this year. The Federal Reserve has announced plans to gradually “taper” its supportive monetary policy: Net acquisitions of agency mortgage-backed securities are expected to cease by the end of March and the Federal Open Market Committee has signaled possibly three 25-basis point increases in the federal funds target by yearend 2022.

Long-term fixed-rate mortgage rates should slowly rise in the coming year: look for interest rates on fixed-rate loans for single-family and multifamily mortgages to average about one-half of a percentage point higher in 2022 than they were in 2021, or about 3.5%.  Even with this increase, fixed-rate loans will still be cheaper than they were before the pandemic: In the 2010-2019 decade the interest rate averaged 4.1% for 30-year fixed-rate loans. And if three hikes in the federal funds target come to pass, initial rates on ARMs, HELOCs and construction loans (often linked to the bank prime) will likely increase from one-half to three-quarters of a percentage point.

Higher mortgage rates and home prices are expected to moderate buyer demand as the erosion of affordability takes a toll. In addition, more for-sale inventory will likely be available on the market. More inventory is expected from three sources: new single-family construction, ‘pent up’ sellers who had delayed selling during the pandemic and will be ready to move in the spring and borrowers who had exited from forbearance but continue to struggle to remain current. With more supply from new construction and existing owners relocating, new and existing home sales are expected to rise about 1% to 7 million sales, the largest number since 2006.

With fewer buyers able to afford homes, we expect homes listed for sale will be on the market a bit longer with fewer competing bidders, which should moderate price growth. The CoreLogic Home Price Index Forecast has the annual average rise in the national index slowing from 15% in 2021 to 8% in 2022.


Rent growth on single-family homes reached the highest ever recorded in the CoreLogic Single-Family Rent Index in 2021, up 11% in the national index over the latest 12-month period. Single-family investors stepped-up their acquisitions of homes during 2021 and multifamily rental starts will likely inch up; rent growth should moderate as additional rental homes enter the market.

More home sales and higher prices will lead to a rise in home-purchase originations in 2022. However, higher mortgage rates will reduce refinance originations this year, perhaps by 50% or more from last year, and alter its composition. During the refinance boom of the past two years, borrowers looking for a “rate-and-term” refinance dominated the market.

Today homeowners have a record amount of home equity wealth, and refinance originations will likely have a much larger cash-out share in 2022 than last year. In addition, refinance borrowers will likely have slightly lower average credit scores (as borrowers with FHA loans refinance into conventional loans with LTV or 80% or less to eliminate the mortgage insurance premium) and a longer average loan term (to keep the monthly payment low in a market where interest rates have risen).

Employment and income growth should continue to keep new delinquencies at a very low level. The 30-day delinquency rate and the foreclosure rate were at their lowest in a generation last year, although the percent of borrowers who had missed six or more payments remained more than one percentage point higher than immediately prior to the pandemic.

The end of foreclosure moratoria and the CARES Act forbearance program will likely result in a rise in distressed sales — foreclosures and short sales — in 2022, but this increase will be small given the record amount of home equity that homeowners have gained through home-price growth. 2022 should be a strong year for housing. Look for mortgage rates to rise but remain historically very low, home sales to increase to a 16-year high, price and rent growth to slow, refinance to shift toward cash-out and delinquency rates to remain low albeit with an uptick in distressed sales.


  1. Interest rate on 30-year fixed-rate loans projected to average 3.5% in 2022.
  2. Home sales rise to a 16-year high.
  3. Single-family price growth slows to an annual average of 8% in 2022.
  4. Less refinance, but with a larger cash-out share.
  5. Loan delinquency remains low but with an uptick in distressed sales.

The post 5 predictions for the 2022 housing market appeared first on HousingWire.

Read More

Continue Reading


SEC initiates legal action against FTX’s auditor

The SEC alleges that Prager Metis, an accounting firm engaged by bankrupt crypto exchange FTX in 2021, committed hundreds of violations related to auditor…



The SEC alleges that Prager Metis, an accounting firm engaged by bankrupt crypto exchange FTX in 2021, committed hundreds of violations related to auditor independence.

The United States Securities and Exchange Commission (SEC) has commenced legal proceedings against an accounting firm that had provided services to cryptocurrency exchange FTX before its bankruptcy declaration.

According to a Sept. 29 statement, the SEC alleged that accounting firm Prager Metis provided auditing services to its clients without maintaining the necessary independence as it continued to offer accounting services. This practice is prohibited under the auditor independence framework.

Extract from the SEC's September 29 statement. Source: SEC

To prevent conflicts of interest, accounting and audit tasks must be kept clearly separate. However, the SEC claims that these entwined activities spanned over a period of approximately three years:

“As alleged in our complaint, over a period of nearly three years, Prager’s audits, reviews, and exams fell short of these fundamental principles. Our complaint is an important reminder that auditor independence is crucial to investor protection.”

While the statement doesn't explicitly mention FTX or any other clients, it does emphasize that there were allegedly "hundreds" of auditor independence violations throughout the three-year period.

Furthermore, a previous court filing pointed out that the FTX Group engaged Metis to audit FTX US and FTX at some point in 2021. Subsequently, FTX declared bankruptcy in November 2022. 

The filing alleged that since former FTX CEO Sam Bankman-Fried publicly announced previous FTX audit results, Metis should have recognized that its work would be used by FTX to bolster public trust.

Related: FTX founder’s plea for temporary release should be denied, prosecution says

Concerns were previously reported about the material presented in FTX audit reports.

On Jan. 25, current FTX CEO John J. Ray III told a bankruptcy court that he had “substantial concerns as to the information presented in these audited financial statements.”

Furthermore, Senators Elizabeth Warren and Ron Wyden raised concerns about Prager Metis' impartiality. They argued that it functioned as an advocate for the crypto industry.

Meanwhile, a law firm that provided services to FTX has come under scrutiny in recent times.

In a Sept. 21 court filing, plaintiffs allege that U.S. based law firm, Fenwick & West, should be held partially liable for FTX's collapse because it reportedly exceeded the norm when it came to its service offerings to the exchange.

However, Fenwick & West asserts that it cannot be held accountable for a client's misconduct as long as its actions remain within the bounds of the client's representation.

Magazine: Blockchain detectives: Mt. Gox collapse saw birth of Chainalysis

Read More

Continue Reading


DOJ readies witnesses in Bankman-Fried trial, highlights FTX asset management

The DOJ intends to highlight the experiences of retail and institutional clients who entrusted substantial assets to FTX.
The Department…



The DOJ intends to highlight the experiences of retail and institutional clients who entrusted substantial assets to FTX.

The Department of Justice (DOJ) has confirmed its intention to summon former FTX clients, investors and staff as witnesses in the upcoming trial involving Sam Bankman-Fried, the former FTX CEO.

The DOJ submitted a letter motion in limine on Sept. 30 describing the witnesses it intends to call concerning FTX’s treatment of customer assets.

The testimonies intend to provide perspectives on the interactions between the accused and the witnesses. It also aims to get the witnesses’ understanding of Bankman-Fried’s remarks and conduct, particularly regarding FTX’s asset management. The DOJ intends to highlight the experiences of retail and institutional clients who entrusted substantial assets to FTX, believing that the platform would safeguard them securely.

Court filing in the United States District Court for the Southern District of New York. Source: CourtListener

Furthermore, a situation has emerged concerning one of the DOJ’s witnesses, “FTX Customer-1,” who resides in Ukraine. Given the ongoing conflict in Ukraine, traveling to the U.S. to provide testimony is associated with difficulties. The DOJ has suggested using video conferencing as a viable alternative. However, Bankman-Fried’s defense has not yet approved this proposal.

Nonetheless, the legal team representing Bankman-Fried, led by lawyer Mark Cohen, has voiced concerns about the jury questions put forth by the DOJ. According to Bankman-Fried’s defense, these interrogations insinuate guilt on Bankman-Fried’s part, potentially undermining the principle of “innocent until proven guilty.“

Additionally, the defense contends that these inquiries may not effectively uncover the jurors’ inherent biases, especially related to their encounters with cryptocurrencies. Moreover, specific questions could inadvertently guide the jury’s perspective instead of eliciting authentic insights, possibly compromising the trial’s impartiality.

Related: Sam Bankman-Fried’s lawyer challenges US gov’t proposed jury questions

With the jury selection scheduled to start on Oct. 3, closely followed by the trial, the spotlight is firmly on this high-stakes legal confrontation. This case underscores not only its immediate consequences but also underscores the vital importance of transparent communication and unbiased questioning in upholding the principles of justice.

Magazine: Deposit risk: What do crypto exchanges really do with your money?

Read More

Continue Reading


Vitalik Buterin voices concerns over DAOs approving ETH staking pool operators

The Ethereum co-founder proposes a solution that could lower the likelihood of any individual liquid staking provider growing to a point where it poses…



The Ethereum co-founder proposes a solution that could lower the likelihood of any individual liquid staking provider growing to a point where it poses a systemic risk.

Vitalik Buterin, the co-founder of Ethereum, has expressed worries regarding decentralized autonomous organizations (DAOs) exerting a monopoly over the selection of node operators in liquidity staking pools.

In a September 30 blog post, Buterin issues a warning that as staking pools adopt the DAO approach for governance over node operators—who are ultimately responsible for the pool's funds—it can expose them to potential risks from malicious actors.

“With the DAO approach, if a single such staking token dominates, that leads to a single, potentially attackable governance gadget controlling a very large portion of all Ethereum validators.”

Buterin highlights the liquid staking provider Lido (LDO) as an example with a DAO that validates node operators. However, he emphasizes that relying on just one layer of protection may prove insufficient:

“To the credit of protocols like Lido, they have implemented safeguards against this, but one layer of defense may not be enough,” he noted.

ETH staked by category chart. Source: Vitalik Buterin

Meanwhile, he explains that Rocket Pool offers the opportunity for anyone to become a node operator by placing an 8 Ether (ETH) deposit, which, at the time of this publication, is equivalent to approximately $13,406.

However, he notes this comes with its risks. "The Rocket Pool approach allows attackers to 51% attack the network, and force users to pay most of the costs," he stated.

On the other hand, Buterin highlights that having a mechanism to ascertain who can act as the underlying node operators is an inevitable necessity:

"It can't be unrestricted, because then attackers would join and amplify their attacks with users' funds."

Related: Ethereum is about to get crushed by liquid staking tokens

Buterin further outlines that a possible approach to address this issue involves encouraging ecosystem participants to utilize a variety of liquid staking providers. 

He clarifies this would decrease the likelihood of any one provider becoming excessively large and posing a systemic risk.

“In the longer term, however, this is an unstable equilibrium, and there is peril in relying too much on moralistic pressure to solve problems," he stated.

Magazine: Are DAOs overhyped and unworkable? Lessons from the front lines

Read More

Continue Reading