Whether you are a buyer or seller you probably have many questions about the state of the housing market and where we are headed for the new year. Here’s what experts are saying about what’s going to happen with real estate for the rest of 2021 and into 2022.
Low Mortgage rates are here to stay
In 2021 affordability has reached one of the highest levels in 30 years due to record-low mortgage rates. Interest rates are rising but projected to stay low. The good news is, experts are predicting that mortgage rates will remain low for the foreseeable future.
Prepare for more Bidding Wars
We’ve seen a lot of bidding wars in 2020 and 2021 and with continued low mortgage rates, eager buyers aren’t going anywhere. Working with a realtor is the best defense for a bidding war, we act as a buffer in negotiations with all parties while advocating for your best interests.
Home prices are appreciating at a slower pace
In 2021 we saw a surge in home values due to the constant battle between high buyer demand and low inventory. Many speculated that we were headed for another housing bubble however as inventory starts to grow, experts anticipate price appreciation will slow down.
Home sales are slowing
Home sales are slowing down but the market is far from being “slow.” After the past two years, the real estate market has been turned on its head and is finally returning to a more balanced position.
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Don’t count on foreclosures
Foreclosures will certainly happen, but don’t wait it out thinking they will get you a better deal. Experts don’t anticipate this leading to anything near the 2008 foreclosure crisis nor the major home value depreciation that followed.
The unemployment spike brought on by the pandemic caused foreclosures for many homeowners across the nation. Employment is slowly back on the rise but it will be a while before we reach pre-COVID levels.
2022 Housing Market Predictions
Many people are wondering are we heading for a housing market crash? The short answer from experts is, “No.”
Home Price Appreciation & Foreclosures
While home price appreciation is currently high, it’s also a result of simple economics: too many buyers and too few homes for sale. Higher inventory rates in 2022 will balance out the market.
The forbearance situation should also be balanced out by the large amount of equity homeowners currently have which means they can choose to sell rather than foreclose.
Lastly, while affordability may be on the decline, historically speaking, it’s still high compared to most other years.
There is still a lot of motivation for buyers and sellers in the market. Inventory rates are projected to rise in 2022 resulting in stabilizing price appreciation across the nation. The inventory situation should improve in the coming year as vaccination rates rise and COVID-19 cases decline, and construction ramps up, and new houses come onto the market.
In the past year, we saw the lowest mortgage rates in the history of real estate. Experts predict that these rates have leveled off so if you are waiting for them to go back down you may be waiting for a long time. Mortgage rates are not predicted to rise a huge amount, however, any increase would mean an increase in monthly mortgage payments. So it may be wise to strike while the iron is hot.
The bottom line is that the housing market is constantly changing so it’s important to stay on top of the latest market news. Sign up for our newsletter and always be the first to know.
Published on 2021-12-04 16:57:25