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  • Writer's pictureTyler Gilmore

A Recap of 2021 & What's Next

Highlights: Housing, Employment, & Inflation


That was 2021 flying by, I can't believe we're already 5 days into 2022! Here at TTT Mortgage, we had another crazy but successful year, thank you for being a part of it! We wish you clarity and strength into the New Year.

From an economic lens, 2021 was marked by a red hot housing market, a labor shortage, supply chain holdups, inflation concerns, a strong equities run, and historically low mortgage interest rates. Let's take a deeper dive into a few of these topics and discuss where they're heading in 2022.

The Housing Market

Even before the pandemic, the US faced a housing shortage due to the increasing number of residents and lack of new & completed construction. Then everyone was forced to stay home and decided they wanted more space. Meanwhile, homeowners that loved their places didn't want to give it up. As a result, demand for homes shot up and supply was even further squeezed. As of September 1, national home prices increased by 19.5% year-over-year (S&P Case Schiller), not to mention roughly 30% annual growth seen in areas like Phoenix, San Diego (woot woot), and Seattle. These price jumps have been a huge win for homeowners and a hurdle for those looking to buy their first home.

Luckily for first-time homebuyers, record low interest rates have been readily available to borrowers, allowing many to afford mortgage payments at these higher loan amounts (ask us for a quote!).

So what's next?

There seems to be a wide range of forecasts for 2022 home prices, though all of them expect positive change. Fannie Mae predicts that home prices will appreciate an additional 7.4% next year, while the National Associations of Realtors expects prices to rise by just 2.8% annually.

Without question, interest rate movement will dictate borrowing power and will be cointegrated with price growth. There is little doubt that mortgage interest rates will begin to increase as the Fed begins to pull themselves out of the bond market and increase their target interest rate (up from 0%). So, watch closely as rates begin their ascent towards 3.5% to see if buyer demand tapers and price growth cools.


Who would have guessed that pulling away from robust unemployment compensation would be so difficult? Turns out it is, and it's harder than ever to get people back to work in low-paying positions.

The lack of workers in the services, daycare, and retail sectors is palpable throughout the country. Companies are raising wages, offering signing bonuses, and posting a "We're Hiring!" sign on their store windows in an attempt to fill these positions.

So, where did these low-pay workers go? Maybe they had time during lockdown to get educated, brush up on some hard skills, and apply for jobs they were interested in.

The jobs are certainly there for the taking. According to CNBC, there were 10.4 million job openings in August, while a record-high 4.3 million people left their jobs over the same period. In other words, employees are leveraging their options now more than ever to jump to the next pay grade and job title by applying to work at other firms.

How do the numbers look overall?

From a macroeconomic perspective, national employment has made a significant recovery since March 2020. As of November, the unemployment rate is 4.2%, compared to nearly 7% a year prior (MBS). As of 12/16, continued jobless claims amounted to 1.845 million people, which is the lowest level since the pandemic. For reference, 5.508 million people were jobless one year ago. As we approach the New Year, we're looking out for a stabilized job market, with less turnover and higher wages for low-paying jobs.


Fed Chair Jerome Powell told us a few weeks ago that current inflation levels might be more permanent than initially expected. The Core CPI (Consumer Price Index) was up 4.9% from November 2020 to November 2021. A few commodities surged in price at much quicker rates, including gas, up almost 50% (AAA), and used cars, up more than 33% (Cargurus).

Some claim that inflation is even worse than the numbers suggest due to "skimpflation," when companies charge the same price for less of their product or service. An example being a food and beverage company shrinking their chip bags and soda cans and charging the same price as before.

Perspective is key.

Looking back to November 2020, when much of the country was still in lockdown and no one had received the Covid-19 vaccine, it's clear that times have changed since then and many areas of the economy have recovered. With that in mind, there remains an argument that inflation is still transitory (nonpermanent).

What's Next for 2022?

To summarize an outlook for 2022, we expect home prices to slow their pace but continue to rise, unemployment numbers and benefits to steadily decrease, and inflation to correct back towards the Fed's 2% annual target.


We hope you enjoyed this article! If you have any questions about the housing market, interest rates, your home, or your mortgage, get in touch today!

This article is for your information only. Projections for 2022 are purely speculative. Consult with your local financial professionals for the most up-to-date information and guidance.

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