Forecasting 2022 Real Estate Trends
No one, even the experts can truly see into the future. And while it would be nice to have a crystal ball to get a peek into what the real estate trends might look like in the coming year, just about every aspect of these trends is pure conjecture using only predictions of data to make those projections. Below are five questions you might be asking if you are looking to buy or sell a home in 2022.
What Should We Expect with the National Trends At Large?
Experts predict that current mortgage rates will stay steady as they have done most of 2021. They also believe that as more and more people are able to recover their jobs affected by the pandemic, that there will be an increase in home purchases. Currently, the demand for new and existing homes is high and the inventory is quite low. The law of supply and demand at this level is expected to remain consistent with what we have seen in 2021.
What Can Median Home Prices Reveal?
From 2020 to 2021, the national median home price shot up from $312,000 to $353,000. This is one of the highest jumps in recent years. This should stabilize some in the next year, but due to the low inventory and the “Seller’s Market,” the law of supply and demand continues to drive up home prices. Also, the cost of goods to build new construction or remodel an existing home remains high due to national supply chain issues which also play a crucial role in the price of a home.
How Does the Recent Ban of Foreclosures Impact 2022 Real Estate?
According to Ramsey Solutions, “The foreclosure moratorium or mortgage moratorium protected homeowners from losing their house if they couldn’t make mortgage payments for reasons related to the pandemic. After a few extensions, the moratorium—which was set up by government-sponsored mortgage programs—officially expired on July 31, 2021. And unfortunately, since then, foreclosure filings have been on the rise—jumping 27% in August and another 24% in September.”
Foreclosures are still way down compared to pre-pandemic levels. And while it’s certainly possible that plenty of foreclosures will happen in 2022, the amount is predicted is still way lower than that of a normal housing market.
Will There Be Another Crash or Bursted Housing Bubble?
Many homeowners are watching the national real estate trends with economic trauma related to the bubble that burst from an over-inflated housing market in 2008, and rightly so. According to experts, there is little worry about another 2008-like housing market crash.
The main reason is that unlike 2008, today there are much more stringent rules and regulations in place for mortgage lending. Additionally, the low housing supply is helping to regulate the demand for homes. One of the main ways a crash might be impending would be if there was a sudden cease for the demand for houses leading to an overabundance of houses for sale and no one to buy them. Then the high home prices might plummet leaving homeowners’ home values upside down.
According to Freddie Mac, there is no danger of significant price drops on the horizon, at least for 2022. In fact, there is an estimate that the growth rate for home prices will drop from 16.9% in 2021 to closer to 7.0% in 2022.
If You’re Planning to Buy or Sell in 2022, What Should You Do?
The best thing to do is to stay vigilant and informed about housing trends, maintain your finances carefully ensuring that you are ready to tackle any costs associated with preparing your home to sell or purchasing a home, and finally—get connected with a real estate professional, who can help walk you through either process in your unique local market.