Now it’s 2022, and both homebuyers and sellers have questions. What lies ahead? Will more houses become available? Will prices continue increasing? Exactly how high will rates climb? To give you accurate answers, we’ve gone to the source: trusted housing industry experts.
Housing market predictions 2022: Insight from 5 experts
Here’s what you can expect for 2022, according to the experts:
1. Mortgage rates should increase.
“Consensus forecasts put rates at about 3.7 percent by the end of next year. So, that’s still historically low, but certainly higher than they are today.”
– Odeta Kushi, First American’s Deputy Chief Economist
2. Remote work should open up more options.
“Affordability will increasingly be a challenge as interest rates and prices rise, but remote work may expand search areas and enable younger buyers to find their first homes sooner than they might have otherwise. And with more than 45 million millennials within the prime first-time buying ages of 26 to 35 heading into 2022, we expect the market to remain competitive.”
– Danielle Hale, realtor.com’s Chief Economist
3. Hot market conditions should cool slightly.
“With more housing inventory to hit the market, the intense multiple offers will start to ease. Home prices will continue to rise but at a slower pace.”
– Lawrence Yun, NAR’s (National Association of REALTORS®) Chief Economist
4. More sellers should list.
“We also expect a growing number of homeowners to bring properties to market, taking some pressure off high prices and offering buyers more options.”
– George Ratiu, realtor.com’s Manager of Economic Research
5. Demand should stay high.
“Strong demographic demand will continue to act as the wind in the housing market’s sails.”
– Mark Fleming, First American’s Chief Economist
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For homebuyers, this means that: The future is looking bright. You’re likely to see the options in your home search expand as more houses are listed, and the intense buyer competition begins to level off in many areas.
Just keep in mind that mortgage rates and home prices are still expected to steadily increase. This may be the motivation you need to seek out your dream home and purchase sooner — while it remains affordable — instead of later.
Danielle Hale also states that, if you’re a homebuyer, there are two market indicators you must stay aware of:
“Going forward, the conditions buyers face are primarily dependent on two things: mortgage rates and housing supply.”
When you buy a home, your mortgage interest rate has a direct impact on your monthly mortgage payment. Rates have already started to rise from the rock-bottom levels of the pandemic. Experts agree that rate increases will continue through 2022.
Thankfully, even with these increases, mortgage rates remain historically low compared to decades past. Rates are also lower than they were several years ago.
The second market factor to take notice of is the number of homes listed for sale. Right now, supply levels sit at 2.1 months — significantly lower than the 6-month supply required for healthy housing inventory levels that satisfy homebuyer demand.
But as the 2022 predictions show, more sellers are expected to list soon. While this won’t correct the inventory shortage overnight, it could give homebuyers more wiggle room, also providing homeowners with more flexibility when they sell and purchase a new house.
For sellers, this means that: You’re still going to have the upper hand for now. These forecasts indicate that we’ll continue to see a seller’s market in 2022; home prices are still expected to rise, albeit much more moderately. Selling your home at a time when demand remains high gives you more control over your transaction.
Your house, for the time being, is likely to gain attention when you list it. Since supply is low and demand is high, you may still see multiple offers – around 3.6 on average. Your home should also sell fast. Houses are currently selling in only 18 days on average.
This doesn’t even take into account the $56,700 in equity the average homeowner has recently gained. Having this amount of equity at your fingertips can make it that much easier to sell and trade up or move to a more desirable location, even as rates and housing prices inch higher.
But don’t put off listing for too long. More sellers are likely to list soon, impinging on your golden opportunity to have your house stand out and get noticed. Find a real estate agent who’s well-versed in your market and who can maximize your home’s potential based on current local inventory levels.
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For educational purposes only. Please contact a qualified professional for specific guidance.
Sources are deemed reliable but not guaranteed.