There are real estate trends to observe every year, and 2022 is no exception. Home prices have risen since last year’s combination of low-interest rates and supply constraints. Demand for homes also resulted in the emergence of five real estate trends.
Current or prospective homeowners can review these five trends to see if now is the time to engage with the real estate market.
- Mortgage rates will increase
Mortgage rates hit a record low in January of 2021. Rates fell as low as 2.65% but have since risen again. By mid-April of this year, mortgage rates reached 5% for the first time in more than a decade.
- Buyer demand and competition will lessen
Work-from-home trends, lack of inventory, and limited supply chains all contributed to the 2021 unprecedented buyer demand. Some economists projected for 2022 that there would be a slightly more balanced housing market. The balance may manifest in less frenzy and greater selections.
- Home value appreciation will plateau
Economists projected that previously fast-paced home price appreciation would slow during 2022. It does not necessarily mean a drop in the prices, but rather some stabilization of these present trends. Buyers and sellers may benefit from stabilized housing market trends. A stable market allows current and future homeowners to plan and budget, whether they choose to get their first mortgage or explore their refinancing options.
- New home construction will improve
Labor shortages in 2021 affected the ability of home-builders to meet construction demand. A building supply shortage further contributed to a failure to meet the demand. These obstacles are expected to diminish during 2022. The result is that more inventory will reach the market, and price growth will slow for home buyers.
- Real estate investors will keep buying
Real estate investors were frequent net buyers of single-family homes despite rising rents and home prices in 2021. These investors are expected to experience solid returns in 2022.
Should People Follow Real Estate Trends?
Homebuyers and sellers can both benefit by making preparations ahead of their real estate endeavors in 2022. Housing market trends and predictions are liable to change. Sticking to established budgets will keep buyers and sellers positioned for getting better home values.