2021 is about to come to close and so is this year’s crazy real estate market. We saw a year filled with skyrocketing home prices and the return of bidding wars over the last couple of years, as well as the lowest mortgage rates we may ever see in our lifetime. There was a continued super low number of homes for sale and moratoriums that made things a bit complicated to navigate.
It has been a year for the books to say the very least, but what does the year 2022 expect to bring us? What are experts predicting is around the corner for the real estate market? Will 2022 offer more of the same ups and downs, or can home buyers and investors expect challenges to begin to settle?
Here’s a look at projected real estate expectations for the coming year
Foreclosures may increase
“Despite some struggles that many have faced during the pandemic, there has been a relatively low number of foreclosures over the last 18 months and this is partly due to a nationwide foreclosure ban. This moratorium expired in July 2021 and foreclosure rates have begun to grow.” – Scott Startsman, Honolulu Realtor®
Home price increases will slow down
One of the largest and most obvious changes within the real estate market over the past year was the high inflation of home cost across the country. According to the latest federal housing finance agency numbers, results showed that home prices jumped 18.5% as compared to the same month in 2020. But there is some good news in sight for homebuyers as the days of ginormous price hikes are going to begin to slow over the next coming year. Many financial analysts expect prices to appreciate at a slower pace than they have over this last year.
Additional: Should you offer over asking price? – David Hornick, Cedar City Utah
Mortgage interest rates will increase
Mortgage rates got much lower than anybody ever expected them to get as the pandemic began and then they became even lower. With the federal reserve tapering its mortgage backed securities purchases because of rising inflation many are expecting that mortgage rates will definitely rise over the next year. Some mortgage rates have already shown signs of increase with the average 30-year fixed rate loan increasing just recently by a few percentage points. Some mortgage analyst experts predict that interest rates could increase to an average of somewhere between 3.3% to 4% over the next year.
Additional: The Best Way to Take Advantage of Your Home’s Equity – Steelman Mortgages
Inventory should increase
“One of the largest hurdles to finding and purchasing a home over the last year and a half has been a very low number of homes for sale. Inventory had its lowest ever record number at one point with just a 3.5 month’s supply of homes for sale. Next year is not expected to see a huge uptick in the amount of inventory but it is expected to increase just a little as time rolls on.” – Guy Amato, Marco Island Real Estate
Though 2022 is not expected to show a huge turnaround in the inventory marking significant high relief to buyers, it is showing promise and a rebound in several areas. Things are happening to show the real estate market is coming back to more of a normal status but it will be a slow and steady rate of getting back.