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The 2021 real estate market brought us steep price increases, fierce bidding wars, and low interest rates. Will this year be more of the same, or will we see changes and shifts in the trends? Here’s what we expect in 2022.
Prices Will Climb, But Not Like 2021
From 2020 to 2021, real estate prices all over the United States skyrocketed. While we don’t think we’ll see the same level of double-digit growth, we do believe prices will continue to climb at a steady pace. So, if you’re a prospective homebuyer hoping the real estate bubble will burst, it’s not happening in 2022. If you find a home you want, it’s best not to delay. Jump on it now, and it will seem like a deal compared to prices at the end of this year.
Mortgage Rates Will Rise
Historically low mortgage rates have kept the economy moving and compelled buyers to jump into the fray. In 2022, we believe mortgage rates will rise. While higher rates can increase buyers’ monthly payments, there is good news. We don’t think they will go up much. So, if you look at mortgage rates over time, they’ll still be enticingly low in 2022.
There Will Be More Buyers than Sellers
Sellers can rejoice because the real estate market will remain their kingdom in 2022. We expect to see more buyers than sellers because some millennials and older members of Gen Z are joining the journey to homeownership. If you’re buying a home in 2022, prepare to face stiff competition.
Getting Pre-Approved Remains Critical
If you can’t pay in cash, the next best thing is to be pre-approved for your mortgage loan. Sellers will take you, and your offer, more seriously if you can show that your financing is secure. Whether you’re a first-time buyer or a seasoned homeowner, working with your loan officer to get pre-approved in 2022 will help you stand above your competition.
Supply Chain Issues Affect New Construction
When there are more buyers than sellers, the answer is to build more houses, right? Well, yes, but it’s not that simple. We predict that new home construction will continue to increase, but not as fast as we’d like to see. Shortages on building supplies, and in some cases labor, will slow new construction in 2022.
The ‘Burbs Are Hot Hot HOT
More Americans are able to work remotely in 2022, freeing them from driving into a city office every day. Not having to face a long commute makes the suburbs more attractive than ever. In 2022, we’ll see buyers continue to widen their geographical home search for larger yards, more square footage, and more reasonable prices.
2022 is shaping up to be a mixed bag of carryover from 2020 and 2021, with a few changes tossed in. Buyers need to be ready to act quickly when they find the house they want, be prepared to pay a premium, and be aware they are probably bidding against multiple buyers. That said, you can still become a happy homeowner in 2022!
