Real Estate Trends To Be Aware Of In 2022

 

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According to Statista data, there were 6.9 million home sales in America in 2021 alone. The coronavirus affected the housing market in many ways, from low-interest rates to a high increase in home prices. However, a lot has changed this year, so there are new realities to be aware of as a seller or prospective home buyer. Here are some trends to know about in the real estate industry in 2022.

Younger buyers will be disadvantaged

Experts also predict that Millenials who have reached first-time buying age will remain disadvantaged than their older counterparts when it comes to purchasing homes. This is because homes are presently more expensive than they were when Baby boomers and other older generations were purchasing their first properties. In addition, boomers are staying in their homes longer since they are living longer. This means that more first-time homebuyers will need financial assistance from friends and family to make down payments, limiting who can purchase a home. Housing affordability in America has been an issue for young buyers for a while. However, the pandemic has only worsened this issue and will continue in 2022.

The continued rise of digital house hunting

There is no denying that COVID-19 accelerated digitalization across various industries, including the real estate market. Consequently, several buyers have purchased homes without stepping foot inside first. These buyers could virtually tour properties due to virtual staging, 3D tours, and drone videos. Therefore, it is highly likely that your current property's next owner will begin their search online. As such, consider partnering with a realtor to help you list your property and find the right buyers quickly.

The rise in interest rates

Many experts predict that the Federal Reserve will increase interest rates a few times this year, meaning mortgage rates will likely increase. Credible sites like Realtor.com and Redfin predict that a 30-year-fixed-mortgage rate will be 3.60% by the end of 2022, compared to the 3.30% current average. This rise in interest rates isn't necessarily bad for buyers. A good thing about higher mortgage rates is the reduction of speculative buyers in the market because there is less profit to be earned. As a result, many buyers will be people who just want to acquire homes and live in them, making the entire housing market sane again.

Prices won't drop

Economists from Realtor.com and Zillow agree that you are likely wasting your time if you are expecting the competition to slow down in 2022. Sellers will continue to have the upper hand due to economic factors like increased demand and low mortgage rates. Therefore, expect to encounter ferocious bidding wars on several homes, especially if you are buying in the summer and spring. No one can predict exactly what will happen, but the economic factors listed will lead to a steady rise in average home prices. Zillow expects home values to increase by 11% in 2022, which is not much compared to 2021 but still considerable.

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