What’s in Store for the Home Market in 2022?
Thanks in part to record-low interest rates, 2021 was a challenging year for would-be homebuyers. Lenders providing cheap money for home purchases naturally led to a real estate gold rush, creating a cutthroat seller’s market. With little available inventory, average home prices increased dramatically, and many buyers were simply priced out.
Will these unprecedented trends continue into 2022? Thing could be turning around for prospective homebuyers. Let’s examine some key market factors to track in the new year.
Rising Mortgage Rates
It might come as some relief to know that interest rates— the largest contributing factor to skyrocketing demand and bloated home prices—are expected to increase in 2022. Though this means new borrowers can expect to pay more over the life of their loan, a rate increase could be just the thing to cool the current white-hot housing market and decrease the competition for inventory.
Current forecasts see interest rates ranging from about 3.5% to as high as 4.25% by the end of 2022.
Price Stability
Despite rising interest rates, home values are not expected to decrease in 2022. In fact, overall home values are expected to increase by as much as 5% in the coming year. Potential homebuyers should act quickly in securing a mortgage, or face higher payments compounded by higher interest and increased home value in the future.
More Homes Available
Signs of a cooling market could lead to an increase in available home inventory as holdout sellers seek to move property before the end of the boom. As with any market, less scarcity will likely translate to improved outcomes for buyers.
A Return to a Buyer’s Market?
Thanks to the conditions outlined above, 2022 has the potential to be a much better year for homebuyers. Lenders are hopeful that market conditions will stabilize following the unprecedented boom of recent […]
