The 2021 housing market was a mixed bag for potential homebuyers. Although mortgage rates reached record high at the beginning of the year, lack of supply ran tough competition and due to home prices to skyrocket.
But there is good news for those waiting to buy a home until 2022, according to Lawrence Yoon, chief economist at the National Association of Realtors (NAR). Housing supply and demand will tend to stagnate, which will quell competition as buyers have more options to consider.
“Moving towards balance is a good thing for both buyers and sellers,” Yoon said. “Buying a house is such a huge expense, people don’t want to rush.”
Here are some things that potential buyers and sellers should know about the 2022 housing market forecast:
- New housing supply market will reduce competition
- Demand will decrease due to increase in mortgage rates
- Home prices will continue to rise, but at a slower pace
Read more about each housing market forecast in the sections below. If you are considering buying a home in 2022, visit credible View Your Estimated Mortgage Rate without affecting your credit score.
The coronavirus pandemic had a tangible impact on the real estate market in 2021, along with labor shortages and supply chain issues cost escalation of new construction. But Yoon predicts that some of these tensions will ease this year, resulting in more inventory being added to the market.
“Last year, we had too much demand and not enough supply, but in 2022 I suspect things will move towards a more equilibrium state,” Yoon said.
For meet buyer’s demandHome builders have “a big profit motive to build more,” Yoon said. More single-family homes are expected to hit the market this year, which will give buyers more flexibility and time to reflect on their home buying decisions.
Yoon expects inventory to start showing up around February, and that even more options will be available by spring. Although competition will subside when more housing supplies hit the market, he expects 2022 to still be a seller’s market.
If you find yourself in a bidding war when buying a house this yearBeing flexible with your closing date can help set your proposal apart from the rest, Yoon said. This gives sellers more time to find a new home and prepare their mortgage during the closing process.
Another way to prepare for buying a home in 2022 is to get a mortgage pre-approval letter to let real estate agents know you’re serious. you can get pre-qualified for a mortgage Trusted but for free.
Interest rates on 30-year mortgages set at record low in January 2021 Federal Reserve Economic policies which affected the wider economy. But the Fed is predicting three interest rate hikes in 2022, which will lead to an increase in mortgage rates.
“We know mortgage rates will rise, but we don’t know when they will suddenly go up,” Yoon said.
A rise in mortgage rates could further reduce buyer competition, although higher interest rates would pose new affordability challenges. In 2022, when new inventory hits the market in the spring, buyers can try to lock in a lower mortgage rate.
If you’re considering buying a home in the next few months, now is a good opportunity to secure your mortgage rate before the Fed raises rates. You can do this Compare rates across multiple mortgage lenders On a trusted marketplace without affecting your credit score.
domestic price rise Affordability took a hit in 2021, but Yoon expects home prices to rise at a more moderate pace in 2022 due to increased inventory.
“I think home prices will continue to rise, but no longer at a double-digit appreciation rate,” Yoon said.
He added that with a more balanced real estate market next year, domestic price rise Consumer prices should be higher in line with inflation. While buyers may not get a bargain price on a home in 2022, they can take comfort in not being in a rush before prices rise further.
Whether you are a seasoned homeowner or a first time home buyer, you can Browse current mortgage rates In the table below and on reliable.
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