Sam Gendusa October 6, 2022

Newsletter - October 2022

Mortgage rates have been flirting with 7% since late September — more than double the all-time low of 2.65% in January — pushed up primarily by the highest inflation we’ve seen in 40 years.

Rates changing this quickly can have a “chilling effect” on homebuyers since what they qualify for can shift from week to week, said Zillow Senior Economist Jeff Tucker.

With a 10% down payment, a home listed at the national median asking price in August 2022 would cost nearly $1,000 more per month than it did a year ago, according to Danielle Hale, Chief Economist at That’s because in August 2021, the average mortgage rate was below 3% and the median home price was around 14% lower.

But interest rates are still low, historically speaking.

For much of the 1980s, Baby Boomers were borrowing at rates of 10% and higher. In October of 1981, the average 30-year fixed rate loan hit an all-time high of 18.6%. (For those doing the math, that’s more — quite a bit more — than double what we’re seeing right now.)

Of course, the average home only cost around $70,000 in 1981. The typical home today costs nearly $435,000.

“We now have the highest ratio of home price to income that we’ve seen in the past 50 years,” said Andy Walden, Vice President of Enterprise Research at Black Knight.

Between mortgage rates and home prices, the high cost of homeownership is creating a slowdown in sales. Home prices are beginning to cool, too, but remain high thanks to continued low inventory.

Maybe not for long. Pantheon Macroeconomics Chief Economist Ian Shepherd said “the plunging trend in sales has further to go,” and that he expects to see house prices dropping as much as 20% in 2023.

That might come, however, at the cost of the greater U.S. economy. The Mortgage Bankers Association predicts a 50% chance of mild recession over the next year.

If that materializes in the first half of 2023, the MBA says mortgage rates could drop back down to as low as 4%. The combination of lower home prices and interest rates could make homeownership more affordable next year.

But “until inflation shows a material moderation, the risk is for further increases in mortgage rates,” said Bankrate Chief Financial Analyst Greg McBride.

The Fed meets again in November and December, and Hale expects those meetings to be eventful. “With investors and mortgage rates both anticipating further short-term rate hikes in these meetings, there is the potential for surprise in either direction,” she said.

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Employee Of The Month

Although Justine has only been with Blue Streak Docs for about a year and a half now, she has been a part of a few different departments already! Justine started in our Document Retrieval department and excelled in this area – constantly producing high numbers with great accuracy. She was transferred to our Order Management team as her customer service skills were incredible and she had built so many great relationships with our vendors. Justine was, again, perfect in the position she was placed in, blowing any quota she was given out of the water! A position opened up in our Title’s department, and Justine jumped right for it. She’s made it clear that she wants to learn everything she can to assist in any way possible when any department needs help, and that’s exactly what she’s done recently! While being in training to move into our Title’s department, Justine has continued to help both our Document Retrieval department and Order Management department. She’s practically working in three different departments on some days! She manages to have high production in any area she assists with, all while maintaining a smile and asking where she can help next. It’s because of this that Justine is our August Employee of the Month!

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