A Return to ‘Normal’? The State of Real Estate in 2022

Last year was one for the real estate history books. The pandemic helped usher in a buying frenzy that caused home prices to soar nationwide by a record 19.9% between August 2020 and August 2021.[1]

However, there were signs in the fourth quarter that the red-hot housing market was beginning to simmer down. In the month of October, only 60.3% of sales involved a bidding war—down from a high of 74.5% in April.[2] While this trend could be attributed to seasonality, it could also be a signal that the real estate run-up may have passed its peak.

 So what’s ahead for the U.S. housing market in 2022? Here’s where industry experts predict the market is headed in the coming year.

MORTGAGE RATES WILL CREEP UP

Economists expect to see mortgage rates gradually rise this year after hitting record lows in late 2020 and early 2021.[3] Freddie Mac forecasts the 30-year fixed-rate mortgage will average 3.5% in 2022, up from around 3% in 2021, while the Mortgage Bankers Association predicts that rates will tick up to 4% by the end of the year.[4,5] However, even a 4% mortgage rate is low when compared to historical standards, which, between 1971 and 2020, averaged 7.89%.[6]

What does it mean for you?

Low mortgage rates can reduce your monthly payment and make homeownership more affordable. Fortunately, there’s still time to lock in a historically low rate. Whether you’re hoping to purchase a new home or refinance an existing mortgage, act soon before rates go up any further. We’d be happy to connect you with a trusted lending professional in our network.

THE MARKET WILL BECOME MORE BALANCED

In 2021, we experienced one of the most competitive real estate markets ever. But price reductions are on the rise, and the time it takes to sell a home has been creeping up since June.[7]

What’s causing this change in market dynamics? Economists suspect a fundamental shift in supply and demand. National Association of Realtors Chief Economist Lawrence Yun points to increased supply from an uptick in new construction and an end to the mortgage forbearance program[8] Demand is also predicted to soften as rising mortgage rates and record-high prices make home ownership unaffordable for a growing number of Americans.[9]

 

Property Search

I’M HERE TO GUIDE YOU

While national real estate numbers and predictions can provide a “big picture” outlook for the year, real estate is local. I can guide you through the ins and outs of our market and the local issues that are likely to drive home values in your particular neighborhood. If you’re considering buying or selling a home in 2022, contact me. I’ll work with you to meet your real estate goals this year.

Contact Us

Sanncha Kiss

614-286-9014

Realty World C. Bagans 1st.

 

Article Sources:

Sources:

  1. Fortune
  2. Fortune
  3. Freddie Mac
  4. Freddie Mac
  5. Mortgage Bankers Association
  6. The Mortgage Reports
  7. Realtor.com
  8. National Association of Realtors
  9. Reuters
  10. Yahoo! News
  11. CNBC
  12. com
  13. CNBC

 

 

Leave a Reply

Your email address will not be published.

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>