The big question on everyone’s mind after the crazy year of real estate in 2021 is what will happen with the housing market in 2022? Will the housing market continue to follow the same pattern as it did in 2021 or are we facing a downturn?
Let’s take a look at what the market did last year. In the past 12 months home prices appreciated and the direct result, due to record-low inventory, was escalating home values.
Experts project an improvement to the inventory situation in the coming year which will slow price appreciation. So, does a slowdown in price appreciation in 2022 mean that houses will depreciate? Industry experts don’t think so, instead they are projecting a modest appreciation of around 5.1% over the next 12 months as compared to a 20% increase that was seen in 2021.
What can we expect from mortgage rates?
Last year saw the lowest rates in the history of real estate. However, if you have clients waiting for interest rates to come back down to those rates, they may be waiting a while. The good news is that experts are projecting mortgage rates to only increase slightly. The best advice you can give buyers who are playing the waiting game, 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 Increase in 2022? Experts anticipate a rise in inventory based on the large amount of equity homeowners nationwide accumulated in 2021. According to market statistics, homeowners gained an average of $56,700 in equity over the past 12 months, which is a huge incentive for sellers to list their home.
Will more inventory will help today’s competitive market, it doesn’t mean prices will fall or that homes will become more affordable. It just means there will be more homes available to choose from and purchase.
Will more inventory help today’s competitive market, it doesn’t mean prices will fall or that homes will become more affordable. It just means there will be more homes available to choose from and purchase. There is still a lot of motivation for buyers and sellers due to a projection of rising inventory and low mortgage rates, which means both sides of the real estate transaction stand to benefit from making a move this year.
The Bottom Line
We can project the future based on current real estate trends, but we certainly can’t predict it. While the 2022 housing market isn’t expected 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. Whether you’re looking to buy or sell Robb Realty Group can sit down with you and customize a plan.