Work from home flexibility and low real estate prices may have helped individuals buy new properties. However, fierce bidding, skyrocketing prices, and inventory limitations have all contributed to making things harder for first-time buyers. The real estate prices increased by almost 16.5% in 2021, but the good news is, experts, believe that the prices may change in 2022 due to market trends.
Real Estate Market in 2022
Most of the real estate experts suggest that the market will remain hot in the coming year but managing inventory may still be a challenge for most buyers. The market saw a home appreciation of around 9.1%, which is an all-time high as compared to the previous year. Most professionals believe that we will see an increase in house prices.
It is important to note that the housing supply is at an all-time low since 1970 because of millennial homeownership and several other reasons. This includes real estate speculators using starter homes. In addition, the rising real estate market is also contributing to this problem.
The change in prices during 2022 may not be sky-high as most professionals believe that the change will be moderate. They believe that the hot US economy, almost a decade after the Great Recession will start to cool down now.
Why Is There a Price Increase Right Now?
Most of the areas that experience an increase in real estate prices are because of lack of supply. Mortgage rates are rising, foreclosure bans do not exist anymore and people are regaining their jobs. Buyers can take advantage of the current low mortgage rates to lock in their home purchases.
In September 2021, we saw balanced transactions in the real estate sector and a rise of 10.2% according to CNBC. More and more people are now listing their homes for sale. We expect these houses to stay on the market for a long time, but it is still crucial for homeowners to act quickly. The housing market is still on the seller’s end because the demand is still higher than the supply.
Most of the real experts believe that the market price increases will be almost half of what we saw up till now in 2021. This growth may even drop lower in 2021 according to the latest forecasts. It means that refinancing will most likely slow down.
Will Things Change?
Market trends are likely to get better in 2022. The American real estate history shows an increase of 5.3% every year. However, price hikes higher than this do not last in most cases. This means that the current price hike will drop down making it an ideal time to invest in real estate.
It would be fair to say that this is the ideal time for new house buyers to lock in their home purchase deals because the mortgage rates are lower than usual. Investing in real estate now will make it easier for new homeowners to meet their house-related expenses in the future. We hope that you find this guide helpful and use it to invest in real estate correctly. We also suggest you take a look at the top factors that impact the real estate market for more information.
EXIT Realty Bob Lamb & Associates is Murfreesboro’s most innovative real estate team.
EXIT Realty Bob Lamb & Associates
2630 Memorial Blvd, Murfreesboro, TN 37129