Yahoo Finance's Ines Ferre examines the inflationary impacts surrounding rising housing prices and mortgage rates.
ADAM SHAPIRO: Talk about inflation. One thing where it hits everybody is whether you're renting, or even buying a house with mortgages, housing prices are high. Mortgage rates are going up. Ines Ferre has been following what is going on in the housing market and what might still be coming at all of us. And Ines, what have you got for us?
INES FERRE: Well Adam, we're finding that inflation is still keeping these prices higher for homes. And if you take a look at the mortgage rates, which have been rising, you had last week for Fannie Mae, or Freddie Mac announcing the 30 year at 3.56%, up 11 basis points from the prior week. And you have the 15 year at 2.79%. So the mortgage rates have been rising. And those homebuyers that were perhaps hoping that if the mortgage rates rise, then you would see sort of a tapering off of prices, or perhaps even a little bit of a relief on home prices.
Well they're still going up. And part of this, of course, has to do with the low inventory. But also part of this has to do with inflation. And keep in mind that in the '70s, early '80s, you had interest rates that were 15% to 18%. But you still had home prices going higher. As far as what the correlation is between mortgage rates and between prices, it's really between activities. So the activity in sales is expected to slow down a bit. But even so, I mean Fannie Mae is saying that sale of existing homes in 2022 will slow down by 3.2%. That's still the second fastest annual pace since 2006.
And as far as prices are concerned, Fannie Mae is expecting a rise of anywhere between 7% and 8% in prices this year. But that's on the conservative side because you had Goldman Sachs last year predicting that this year, you would see home prices go up by about 16%. So net, net, home buyers that have been sitting on the sidelines are now also trying to rush out to buy homes before the mortgage rates go higher. They're still seeing high prices for the homes.
ADAM SHAPIRO: All right, Ines. We're going to keep talking about what's coming down the pike, not only for people trying to buy a home, but even those who want to build one.