With moratoriums in place, foreclosures were nearly non-existent last year. Even as pandemic protections have lifted, a foreclosure wave—which was an industry concern—has not occurred.

“The COVID-19 foreclosure tsunami that some people had anticipated is clearly not happening,” says Rick Sharga, executive vice president at RealtyTrac, an ATTOM company. “Government and mortgage industry efforts have prevented millions of unnecessary foreclosures, and while it’s likely that we’ll see a slight increase in the first quarter, we probably won’t see foreclosure activity back to normal levels before the end of 2022.”

Foreclosure starts also were at a record low nationwide in 2021, according to the ATTOM Data Solutions report. The states that saw the largest declines in foreclosure starts compared to the previous year were Maryland (down 81%), Oklahoma (down 70%), Idaho (down 64%), Nebraska (down 63%), and Connecticut (down 60%).

“The government’s foreclosure moratorium, the mortgage forbearance program, and the mortgage servicing guidelines enacted by the CFPB in August have kept foreclosure starts artificially low over the past year,” Sharga says. “While the recovering economy should prevent a huge increase in defaults, we should see a gradual increase in foreclosure activity as these programs expire, and servicers exhaust all loan modification options for delinquent borrowers.”

Inflation continues to press on mortgage rates. The 30-year fixed-rate mortgage averaged 3.45% this week, up from last week’s 3.22% average, Freddie Mac reports.

“Mortgage rates rose across all mortgage loan types, with the 30-year fixed-rate mortgage increasing by almost a quarter of a percent from last week,” says Sam Khater, Freddie Mac’s chief economist. “This was driven by the prospect of a faster than expected tightening of monetary policy in response to continued inflation exacerbated by uncertainty in labor and supply chains. The rise in mortgage rates so far this year has not yet affected purchase demand, but given the fast pace of home price growth, it will likely dampen demand in the near future.”

Despite rising mortgage rates, owning a home remains more affordable than renting, the National Association of REALTORS® reports. The monthly mortgage for owning a median-priced home is $1,260 compared to the average rent of $1,540, NAR notes on its Economists’ Outlook blog.

Freddie Mac reports the following national averages with mortgage rates for the week ending Jan. 13:

• 30-year fixed-rate mortgages: averaged 3.45%, with an average 0.7 points, rising from last week’s 3.22% average. Last year at this time, 30-year rates averaged 2.79%.
• 15-year fixed-rate mortgages: averaged 2.62, with an average 0.7 points, increasing from last week’s 2.43% average. A year ago, 15-year rates averaged 2.23%.
• 5-year hybrid adjustable-rate mortgages: averaged 2.57%, with an average 0.3 points, rising from last week’s 2.41% average. A year ago, 5-year ARMs averaged 3.12%.

Freddie Mac reports average points along with commitment rates to better reflect the total upfront cost of obtaining the mortgage.

A pleasant neighbor can make homeowners happier, studies have found. But do certain cities and towns tend to be more neighborly than others? StorageCafe, a storage unit search site, surveyed nearly 11,000 Americans to gauge neighborliness across the country. They factored in satisfaction with neighbors, sense of community, involvement in community activities, and willingness to recommend the neighborhood to others.

Nationally, nearly half of Americans say they feel a strong sense of community, and 67% are happy with their neighbors.

Most Common Complaints About Neighbors

But in some locales, residents are happier with their neighbors than in other places. Indianapolis topped the list as the most neighborly place in the U.S., according to the survey. More than half of residents surveyed in Indy say they’d recommend their neighborhood to other people. Columbus, Ohio; Houston; and Nashville, Tenn., also ranked high for their strong sense of community.

Friendly neighbors aside, Americans say the following are the five features they love most about their neighborhoods:

• Location: 36%
• Quiet environment: 26%
• Parks and recreation areas: 14%
• Local infrastructure and services: 12%
• Schools: 10%

The housing market doesn’t appear to be following its typical seasonal slowdown this winter. Home buyers appeared in a rush last week, with economists crediting rising mortgage rates.

Mortgage rates moved to their highest level in more than a year, the Mortgage Bankers Association reports. Buyers who are already facing higher home prices are watching mortgage rates closely as they affect what shoppers can afford.

Mortgage purchase loan applications increased 2% last week compared to the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Purchase applications, however, are 17% lower than the same week a year ago, but real estate pros say that is primarily due to low inventories of homes for sale. They reported to CNBC anecdotally higher-than-normal activity in early January from home shoppers.

The MBA reports that the average contract interest rate for a 30-year fixed-rate mortgage for conforming loan balances rose to 3.52%, up from 3.33% the previous week. That marks the highest contract rate since March 2020.

“Mortgage rates increased significantly across all loan types last week as the Federal Reserve’s signaling of tighter policy ahead pushed U.S. Treasury yields higher,” says Joel Kan, an MBA economist. “The housing market started 2022 on a strong note. Both conventional and government purchase applications showed increases, with FHA purchase applications increasing almost 9%, and VA applications increasing more than 5%.”

House hunters are watching mortgage rates closely. After all, every increase could have an impact on affordability, particularly given escalating home prices.

Nearly half—47%—of home buyers recently surveyed say they would feel more pressure to buy a home if mortgage rates passed 3.5%, according to a new consumer survey conducted by Redfin.

Mortgage rates are largely forecast to continue to rise over the coming months. Last week, the 30-year fixed-rate mortgage rose to its highest average since May 2020, averaging 3.22%, Freddie Mac reports. The National Association of REALTORS® forecasts that mortgage rates will average 3.7% by the end of this year.

Buyers who were surveyed say that increases in mortgage rates would also have an impact on the type of home they decide to purchase. Twenty-nine percent of buyers say that if mortgage rates increase above 3.5%, they will change their target areas to buy a home and seek a smaller one.

Only 7% of the 1,500 home buyers surveyed say they wouldn’t change their plans at all if mortgage rates rise above 3.5%, the Redfin survey shows. Only 2% would cancel their plans to purchase a home altogether if rates increase past that amount.

“Mortgage rates increasing will make homebuying less affordable,” says Daryl Fairweather, Redfin’s chief economist. “Over time, that will put the brakes on demand and put an end to double-digit annual price growth. But in the short term, this increase will light a fire under home buyers and make for an extremely competitive January.”

What makes for a great market for first-time buyers? Areas that have strong job markets, short commute times, affordability, high inventories of homes for sale, and a population that skews younger, according to realtor.com®’s newly released Best Markets for First-Time Homebuyers Report.

“Buying a first home is always a challenging undertaking, and it’s been an especially tough couple years for first-time buyers, many of whom are struggling to find a home that’s within their budget to win in a competitive bidding situation,” says Danielle Hale, realtor.com®’s chief economist. “With this in mind and the fact that remote work has given people more flexibility in where they live, we wanted to identify markets where first-timers have a chance to become homeowners and find a great quality of life.”

Realtor.com® found a lot of commonalities in markets that tend to be havens for first-time home buyers. For example, the top markets generally offer nearly twice the number of homes for sale than the national average. Also, they have a younger population than the country overall:—an average of 15.2% of residents who are between the ages of 25 to 34 years old, compared to 13.5% for the nation. They also tend to offer more affordable homes with the home price-to-income ratio in the top markets lower than the national average.

All the cities on realtor.com®’s list are located within metro areas that are predicted to have strong home sales and price growth in the future too, making them likely smart investment buys as well.

The following are the 10 markets that topped realtor.com®’s list as best markets for first-time buyers in 2022: