The 2021 housing market was insane, but as the new year begins, the rush is beginning to cool. You’ve finally looked into buying a home, but what should you do first and what do 2022 trends hold in store for homeowners’ finances?
There’s a storm on the horizon of mortgage rates. With the hot market, lenders were more willing to give out big loans for low rates, but the predictions for 2022 show that the average rate on a 30-year fixed loan will rise to around 4%, a rate largely attributed to a strong economic recovery from the pandemic.
Joel Kan, chief economist at the Mortgage Bankers Association (MBA) also speculates in a RisMedia article that as mortgage rates rise, refinancing activity that’s been hot through various markets, refinancing will take a hit. “We’ve been in this lower rate environment for the last year and a half, and we’ve seen a lot of refinances,” he says, noting that 2020 was a banner year for loan origination and refinancing under record low rates that lasted well into 2021, mortgages included. Still, there doesn’t seem to be a lot of concern that the market will crash or any chaos is on the way. The market suggests ongoing competition and a persisting supply-demand gap as the economy gets back on its feet and re-balances after tough times.
Now that you’ve sorted out your mortgage and bought your new home, it’s time to protect it. What should you expect as a consumer shopping for new home insurance?
Firstly, it’s important to keep in mind that in 2021, the National Oceanic and Atmospheric Administration says that 18 weather events costing at least $1billion each in damages have hit the US. Insurers are facing losses and that means increased premiums for homeowners. With supply chain challenges still prevalent at the end of 2021 and into 2022, the cost of home repair has risen, a cost that gets passed down to insurers and eventually policyholders.
The good news is that more insurers have adopted Loss Adjustment Expense, which allows consumers to file a ‘DIY’ claim rather than passing the work to an insurance company adjurer. This means that policyholders can send pictures and drone imagery, descriptions of damages, and more from their phones, allowing insurers to immediately process claims, streamline the process, and cuts costs for insurance providers.
Curious about the future of home and property insurance? Visit Bleiler Insurance today for the best insurance rates of the year!