What will happen with the housing marketing in 2022?
As we wrap another crazy year for real estate, there’s one big question on everyone’s minds right now: will the 2022 housing market continue to follow the same trajectory, or are we facing a possible downturn?
In today’s market, the most powerful tool you have to beat your competition is knowledge. So, let’s take a deep dive into what leading real estate experts are projecting for 2022 so you have the confidence you need to crush your goals this year.
2022 HOUSING MARKET PREDICTIONS
The past two years have been full of exciting and record-breaking moments. It’s also seen its fair share of buyer fatigue, hesitancy and confusion. Here’s what industry experts are saying about what they anticipate for the 2022 housing market
Will Home Prices Go Up or Down?
In the past 12 months, home price appreciation has been the topic of many headlines and not in a good way. Speculation that we’re in another housing bubble has kept many buyers and sellers hesitant that we’re headed for another crash.
So, what does the future hold for home prices? It’s important to remember that the 2021 market was anything but normal, and that escalating home values were a direct result of record-low inventory.
However, experts project that the inventory situation should improve in the coming year, slowing price appreciation. But will home prices depreciate in 2022? Over 100 industry experts don’t think so. Instead, they are projecting a more modest appreciation of 5.1% in the next 12 months compared to the nearly 20% rise seen on average in 2021.
What’s Going to Happen with Mortgage Rates?
In case you didn’t know, the past year saw the lowest mortgage rates in the history of real estate. So, if you have clients who are waiting for those rates to come back down or go down more, they may be waiting a very long time.
What’s important to remind your clients is that while homes right now may be less affordable than they were a year ago, they’re still extremely affordable.
If we look at the 30-year mortgage rate chronicled by Freddie Mac, we can see the average rates by decade:
- 1970s: 8.86%
- 1980s: 12.7%
- 1990s: 8.12%
- 2000s: 6.29%
- 2010s: 4.09%
While experts don’t project that mortgage rates will rise a large amount, any increase would mean an increase in monthly mortgage payments. A couple decimal points may not seem like a lot to most people, but it could make or break someone’s budget.
If you have buyers that are playing the waiting game, the best advice you can give to them is that a rise in mortgage rates coupled with continued home price appreciation only means one thing: paying more for the same house they’d buy now.
Will Housing Inventory Rise in 2022?
Inventory has been, without a doubt, the biggest player in the anything but ordinary real estate market we’ve experienced in the last two years.
With buyer fatigue running high, you’re probably getting asked, “Will housing inventory increase in 2022?”
The good news is, there are many factors that lead industry experts to anticipate a rise in homes for sale.
Of homeowners planning to enter the market in the next year:
- 65% – Have just listed (19%) or plan to list this winter
- 93% – Have already taken steps toward listing their home, including working with an agent (28%)
- 36% – Have researched the value of their home and others in their neighborhood
The other big factor playing into a possible rise in inventory is the large amount of equity accumulated nationwide in 2021. According to experts, homeowners gained an average of $56,700 in equity in the past 12 months, a big incentive for sellers to list this winter. While more inventory may take a bit of the edge off of today’s competitive market, it’s important to remind your clients that it doesn’t mean prices will fall or homes will become more affordable. There will just be more available to choose from.
WHAT DOES THIS MEAN FOR BUYERS & SELLERS FOR 2022?
There is still a lot of motivation for buyers and sellers in the market, and that’s not expected to change in the coming months. With experts projecting a rise in inventory and mortgage rates remaining relatively low, both sides of the real estate transaction stand to benefit from making a move this year. While today’s market might not be as crazy as it was a year ago, it’s still strong. Waiting until next year could mean losing out on a less competitive market and better affordability: the two biggest factors positively impacting buyers and sellers today.
If we’ve learned anything in the past couple of years, it’s that while we can project the future, we can’t predict it. While industry experts don’t expect the 2022 housing market to be as crazy as 2020 or 2021, it’s important to stay on top of the latest insights because there are so many factors that can alter the course of the industry.
WE CAN MAKE THE SALE OF YOUR CURRENT HOME 100% CONTINGENT ON YOU FINDING THE HOME OF YOUR DREAMS AND IF YOU DON’T FIND IT, YOU DON’T HAVE TO MOVE.
Let us streamline the process of maximizing the profits on your current home and get you into the home of your dreams! Our direct line is (714) 203-1669 or send an email to office@UltimatePropertiesSold.com.