Mortgage

Maine home prices will keep rising in 2022 despite higher mortgage rates

Maine home prices will keep rising in 2022 despite higher mortgage rates
Written by Publishing Team

Experts say the days of mortgage rates below 3 percent will end next year as the Federal Reserve tries to combat inflation, which makes home buying more expensive, but cools down a bit from the hot Maine real estate market.

The confluence of factors will affect home prices and mortgage interest rates in the new year. Higher interest rates often cause banks to raise mortgage rates when borrowers refinance or start a new mortgage. Higher inflation means higher rates, which can lead to lower home prices. At the same time, prices tend to rise in times of high inflation.

The result of these conflicting trends, economists say, is that home prices will continue to rise, but not as quickly as they have been this year. Homes will be affordable for all cash buyers, but it will be more expensive for the vast majority of buyers who have to take out more expensive loans.

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