Housing Market Predictions for 2022, Falling Home Prices, and More
The Covid-19 pandemic caused major changes to the housing market. Incredibly low mortgage rates, along with inventory shortage, creating a hot market. Buyers and sellers alike were seeing houses selling within just hours of being listed, sometimes sight-unseen, often for much over the listing price.
Toward the end of 2021, the housing market seemed to settle a little bit, and going into 2022, experts are optimistic that the market will continue to calm down, buyers can still expect similar trends to the previous year.
Many people are wondering when the housing market will crash again, but there’s no need to worry about a crash in 2022, according to experts.
Experts told CNBC that the housing market forecast for 2022 remains positive, and while the market will continue to be a sellers market, it will be much easier to find and purchase a home in 2022.
If you’re looking to buy a home this year, here’s what you need to know.
Prices are Falling and Competition is Easing
The average price of homes in the U.S. went down in the 3rd week of December during the holiday season, down $26,000 from the 2021 peak price. While there is always a drop in home prices during the holidays, this year’s $26K gap is the largest seasonal price gap since 2012.
According to Redfin, 59.5% of home offers faced competition in November 2021. That might sound like a lot, but it was the lowest in 2021 to date, much lower than April 2021’s high of 74.6%.
Supply is Increasing
On the other hand, housing supply was increasing at the fastest pace of the year since May 2021. The median forecast of available homes at the end of 2021 was 1.57 million; but in December, there were 1.68 million homes available on the market.
According to Insider, building permits rose more than expected at the end of 2021, meaning that even more new homes will be getting to the market throughout the upcoming year. The number of building permits is predicted to increase in 2022 and beyond, too.
Buy Now or Wait?
For many people, including families or older homebuyers, 2022 will be a great time to buy their forever home.
Those who are looking to buy a home and stay there for the next 10 years or more are in luck. Mortgage rates will start to rise, compared to 2021, which will ease competition for homebuyers. It’s best to lock in mortgage rates now before they go up.
The Bottom Line
The housing market is still hot, and homes will still be selling quickly, but the market will begin to slow down compared to 2021. Compared to the previous year, 2022 will be a much better time to buy.
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