WFG founder and Executive Chairman Patrick Stone shared his thoughts about the 2022 economy and housing market during the second edition of October Research’s economic series forecast webinar.
Stone began by reviewing the optimistic predictions for the economy made going into the new year.
“It appeared that we were going to have a good market again, maybe a little bit less than 2021, but most predictions were that we see something like maybe a 2 percent to 5 percent decline in sales, refis would drop maybe 25 percent, that mortgage rates would stay below 4 percent and that inflation would begin to ease,” he said. “Well, we had a little bit of a change, and that was the geopolitical issue with Russia invading Ukraine.”
The conflict’s impact is far reaching, Stone said, raising mortgage rates, increasing inflation and, depending on how long it continues, causing a lot of unknowns.
“Where this is really going to hurt and impact all of us is on lower-income households and especially on starter home purchases, because people on lower incomes and buying starter homes are not going to be able to participate to the level we anticipated because they’ve had a real and meaningful impact on their income,” he said.
On the other hand, millennials coming into household formation age comprise the largest group ever, larger even than the baby boomers, Stone said.
“We have a tremendous amount of potential first-time buyers going to occur over the next three to five years,” he said. “If we get back to a regular economy, that will really manifest itself in a pickup in starter homes and first-time homebuyers.”
To learn more about Stone’s analysis, including whether he thinks we are in a housing bubble and if we are heading toward a recession, as well as his tips for coping with the unpredictable market, listen to his 30-minute webinar here. Thanks to SoftPro’s sponsorship, it’s free.