With so much going on across the country and the cost of everything going up, you may be wondering how this is impacting real estate trends.
Will home values skyrocket even more? How will the real estate market develop in the current economic climate? Whether you’re selling, buying, or staying here, here are the real estate trends to watch in 2022.
Real Estate Trend # 1:
Housing Inventory Is Scarce But Growing
The real estate market has been plagued with inventory shortages for some time. It simply meant that not enough homes were being sold to meet buyer demand, a real estate trend that only got worse during the 2020 craziness. But there is hope: Home stocks rose by 30.7% in July 2022, the biggest rise ever.
What Low Inventory Means For Buyers
Low inventory means you have to be smart when looking for a place to live, as the best homes are likely to sell out quickly.
Find a knowledgeable agent to help you buy your home. That doesn’t leave much time to sift through your apartment search. If you want to find a good home in this narrow market, here are some tips.
Sacrifice Some Wishes.
If you can’t find the home you want, be prepared to give up your “nice-to-haves” for the “necessities.” Find the cheapest home in the best neighborhood you can afford and upgrade over time. Expand your search.
Are the places you want to shop too competitive? You might be surprised by what gems you can find in less popular areas. Hiring a real estate agent who knows the area well is the best way to find a home that fits your budget and lifestyle.
Get Pre-Approved as Soon as Possible
Getting a mortgage pre-approval before starting a home search is a must in any market. And when home goods run low, it’s even more important. In a market like this, failing to do this in advance gives pre-approved buyers the freedom to steal the home you want right away. It may get lost.
What Low Inventory Means For Sellers
When selling a house, less inventory means less competition. So if your home is in a great location or has features that buyers want, you can probably expect multiple offers coming your way.
Real Estate Trend # 2:
Annual Home Prices Are Still Rising
Yes, real estate prices are rising every year. The median active listed home price in August 2022 rose 14.3% to $435,000 compared to August 2021.4 It lags behind the 16% compound annual growth rate recorded in Picking up Price growth is moderate.5,6
What Higher Prices Mean For Buyers
If you’re looking to buy a home in this expensive market, it’s important to know how much you can actually afford. We promise to stay within that budget no matter what. Don’t give in to buying pressure because you’re tired of seeing your competitors rip good homes off the market.
Follow These Tips To Safely Buy a Home This Year
Limit your housing payments to no more than 25% of your monthly take-home pay. This payment includes principal, interest, property taxes, home insurance, and Homeowners Association (HOA) fees. Also, if your down payment is less than 20%, Private Mortgage Insurance (PMI) — an additional fee added to your mortgage to protect the lender (not you) if you fail to pay.
Save a big down payment. Ideally, you should save at least 20% down payment to avoid PMI. A small down payment of 5-10% is fine for a first-time homebuyer, but then he has to pay a PMI. You can save a lot of money like this! You have to be patient and stay focused. who knows? maybe able to save a five-figure down payment by this time next year!
Choose a classic mortgage with a fixed rate of 15 years. The lowest total cost mortgage (and the only one we’ve ever recommended) is a 15-year fixed-rate mortgage. High-priced rip-offs like 30-year mortgages, FHA, VA, USDA, and variable-rate mortgages charge tens of thousands of dollars in additional interest and fees, leaving you in debt for decades. Stay away from them!
What Higher Prices Mean For Sellers
A great victory may be on the horizon! This is great news. Because you really need that extra cash when you buy your next home. To get the best deal for your home, work with an experienced agent who is familiar with the current local real estate trends market.
Real Estate Trend # 3:
High Mortgage Interest Rates
Average mortgage interest rates (the rate that lenders charge as a percentage of the loan amount) hit a record low in 2021. But things have improved since then.
What Higher Prices Mean For Buyers
High-interest rates can reduce affordability. So don’t feel pressured to buy an unprepared home. But don’t procrastinate.
High-interest rates on affordable housing are still viable.
Don’t forget to follow our advice on monthly payment limits, down payment amounts, and mortgage types (see real estate trends #2).
What Higher Prices Mean for Sellers
Higher interest rates mean fewer buyers want to buy your home. About a year ago, homes were selling like hotcakes, but yours may have been on the market for a little longer. Please be patient while waiting for the offer.