It’s safe to say that the housing market was agitated by the Coronavirus pandemic over the past year or so. Americans decided they wanted to go bigger and add space, home prices increased significantly, and interest rates plummeted to historical lows. After the record-breaking these past two years, we might see the housing market starting to calm down slightly during the balance of 2022. Here’s what you should anticipate:
5 Housing Market Trends in 2022
- Housing affordability remains a bit challenging – Housing affordability remains a challenge – the pandemic delivered what experts called a devastating blow to US budgets by taking additional funds out of some people’s pockets. However, this was softened just enough as interest rates dropped to the lowest they have ever been leading up until today which allowed buyers more money than usual for mortgages. According to data compiled last summer from National Association of Home Builders (NAHB) – an industry group that represents developers and builders- average existing homes sold at $355K-$10k higher than the previous quarter.
- Latinos will dominate American home buyers – an Urban Institute research study has predicted that Latinos are going to emerge as the largest home buying demographic during 2022 and beyond. According to their estimates, 70% of all new homeowners in the US will be Hispanic. Despite the recent surge in home prices, that tsunami of Hispanic buyers is still coming as Latinos will be a major buying force in the years ahead.
- Mortgage rates will most likely rise, though how much is uncertain – mortgage rates fell to 2.93% on 30-year home loans, an all-time low. Consequently, the banking industry experts are expecting it to increase during 2022. According to Freddie Mac’s chief economist, Sam Khater, consumer spending and rising inflation is going to drive interest rates higher.
- Offers made by iBuyers aren’t going to be as aggressive – during the pandemic –driven housing boom, iBuyers (“instant” buyers or online investors) became very aggressive in their buying habits. It was not uncommon to see them pay homeowners higher-than-market prices for their properties.
- We’re finally seeing a slow-down in housing price appreciation – home prices appear to be cooling off somewhat considering the intense run up the past 2 years. At the beginning of the pandemic, homes sold by agents and brokers for an average of $280,700. By June of 2021 that figure had increased 29% to nearly $363,000. However, prices were holding steady around $350,000 at the end of 2020.
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Our mortgage experts are here to answer your questions and We are here to assist you through the process . For more information regarding the above, or to discuss your housing needs with a professional, call Liberty Capital Services today at (614) 505-0620.