If you’re interested in buying a new house, you’ve probably already realized that the current real estate market is hot, hot, hot. Will this continue? Will prices continue to rise or will they settle down and possibly even lower? Will the market crash again? In order to answer these questions, it’s helpful to look at the current 2022 housing trends.
Fortune tells us that in spring 2021, over 70% of home listings saw a bidding war. With the number of would-be buyers outnumbering the homes for sale, people had no choice but to offer over listing price if they wanted to “win” a house. Is this still happening? Will this continue well into 2022? Let’s look at what the real estate experts have to say:
The same Fortune article tells us that U.S. home prices soared an unsustainable 18.8%. This happened for a number of reasons, including record-low mortgage rates and low inventory. Because of the pandemic, few developers were building new homes. When there aren’t enough new homes to go around, competition for older homes being put on the market goes up. When competition goes up, prices do too. We haven’t yet met the need for additional houses in the area, so prices remain higher than normal.
Because much of the competition and high home prices can be at least in part traced back to incredibly low mortgage rates, the rates are now being raised. In fact, we have already seen mortgage rates rise in the early months of 2022. Many experts within the industry expect this will continue. The Mortgage Bankers Association predicts that rates on average 30–year fixed rate mortgages will hit 4.5% by the end of 2022, up from their 4.3% projection just a month prior. Holden Lewis, home and mortgage expert at Nerdwallet says “Mortgage rates will have their ups and downs in 2022 and I wouldn’t be surprised if they end the year at 4.5% or higher.” Many economists expect rates to hover around 4% for most of the year.
If you were hoping for the bubble to burst, we’re sorry to say that it doesn’t look like this will be the case. Not only does the spring housing market look like it’ll be red-hot, current housing trends tell us that there is a good chance this year goes down as the hottest spring homebuying season ever! Already, bidding wars are picking up again. It remains a seller’s market, so don’t come to the home of your dreams expecting to offer a bid lower than the asking price.
That being said, it’s not all bad news. Some experts predict less intense competition in the housing market later on in 2022. This is due to the combination of rising interest rates and rising house prices. These two factors will push some would-be buyers out of the market altogether. Some people won’t be able to compete. This may result in reduced competition after the summer buying season is over, particularly here in Florida.
Don’t let the hot real estate market scare you from buying a home you’ll love for years to come. We encourage you to consider the homes in Rivington. We work hard to ensure living in our neighborhood is what’s best for your long-term happiness and financial success. You can feel confident that the investment to live in our neighborhood is one that will pay off!
There are many ways to make living in Rivington a realistic possibility, despite a tough seller’s market. For one, find the right loan for you. Traditional loans require you to put 20% down, but not all do. Explore options such as Federal Housing Administration (FHA) loans, which only require 3% down. There are also options specifically for veterans and other special groups. As well, you may consider buying a townhouse rather than a single-family home, as these are typically less expensive. Just because the housing trends predict the industry to remain hot doesn’t mean you’re stuck where you’re living now. Rivington is a much better option, and it’s a realistic option too!