In a nutshell, 2020 and 2021 were a wild ride for the housing market. After early predictions of a housing slump after the pandemic hit, the market surprised everyone, and went the other way and then some! Curious what 2022 is set to have in store? Check out the following housing market predictions for 2022 below!
Mortgage Rates Will Rise
The past 2 years have seen some of the lowest mortgage rates in history, which helped propel many into the home buying journey. These rates can’t last forever, however, and you should expect that rates will be rising as we get further into the year. For example, in December of last year, the national average 30-year fixed rate was around 3.11%. Recent national averages for the same mortgage is up to 3.76%. Despite this, the spring season for the housing market is still predicted to be one of the hottest in recent years.
Bidding Wars Will Stay
Even though mortgage rates increased in January of this year, it has the highest amount of housing bidding wars since the pandemic began. In fact, it was estimated that as much as 70% of homes listed faced bidding wars! Housing inventory is still playing catch-up since the huge surge in demand last year, so these bidding battles are expected to be prominent well into the spring season.
Housing Prices Will Rise, But Not Drastically
Most experts have agreed that the average price of home across the U.S. will continue to increase for 2022, with most predictions being between 4-6% price gains. Despite this, experts also expect that the explosive price spikes that were seen in late 2021 will slow down as we get further in 2022, which is good news for first-time home buyers.
Increased Construction
After the huge spike in housing demand, almost every builder in the U.S. was scrambling to keep up, and combined with a national lumber shortage, home inventory was incredibly tight. There is a light at the end of the tunnel. Later in 2022, it is expected that a balance can be brought back to housing inventory as construction continues to grow and builders start to have more inventory available for buyers. So if you’re thinking you can only find a ‘good enough’ home instead of what you really want, being patient and waiting a couple months could benefit you.
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