Predictions for the Housing Market
The third quarter saw an 18.5% increase in home price appreciation year-over-year (YOY), the highest in the Federal Housing Finance Agency's House Price Index history. The rate of inflation has risen at an unprecedented pace since 1982. The number of homes for sale has fallen simultaneously, putting more pressure on home prices. The housing supply fell to its lowest point, with only 1.38 million homes available for sale in June. This is down 23% annually. The number of days that homes remained on the market was cut to record lows by buyers who snapped up houses faster. Mortgage rates have remained steady at 3.1% for a 30-year fixed-rate mortgage. Although it is not the lowest, it is very close.
Will It Crash Or Boom?
The most common prediction about the housing market for 2022 is that inventory in 2022 will remain low but that prices will rise slower than this year. Spring and summer will see an increase in the listing, but it is unlikely that enough inventory will be available to meet the demand. There has been a strong housing market in 2021 with high demand in nearly every part of the country. In 2022, the same trend will be observed.
A shortage of inventory has led to a hot housing market. Homes sell within hours of being listed and often for much more than the asking price. Many housing experts believe that buyers can predict the same trends as in the past two years, including increased prices, low inventory, and quick turnaround.
The US housing market is facing significant challenges. Experts predicted that mortgage rates for housing would rise in the coming year. This year has seen a steady increase in the cost of borrowing money via mortgages. Experts predicted that mortgage rates would rise this year. However, they rose faster than anticipated, with 30-year fixed-rate mortgages averaging over 4% in mid-February.
Bankrate reports that the national average 30-year fixed mortgage rate was 4.30 percent as of March 1, 2022. This is an 8-basis point increase over the previous week. The average rate for a 30-year fixed mortgage, which was 3.78 percent, was lower last month. The average rate on a 15-year fixed mortgage was 3.51 percent, increasing seven basis points over a week.
Although today's rates may not be outrageous by historical standards, they are still much higher than previous years. This will have some knock-on effects on the US housing market, though it is unlikely that they will cause significant drops in housing prices. Although rising mortgage rates could dampen housing demand, it is not likely that home prices will stop increasing. It is more likely that the rate of home price appreciation will slow down.
Despite rising mortgage rates and higher prices, the housing market should stay strong due to tight inventories and growing demand. More millennials are expected to purchase houses in 2022. According to a 2020 NAR survey, millennials now make up the largest percentage of US homebuyers. A new survey by Realtor.com shows that buying is cheaper than renting in many of the nation's largest cities.
This is good news for millions of millennials approaching peak homebuying years. The largest generation of millennials in history is in their mid-thirties and approaching their prime years for home-buying. They delayed purchasing a house, but they are back in full force. We now have homeownership for two, four, or five years. Fannie Mae's National Housing Survey revealed that 44% of respondents believe home prices will rise in 12 months. However, 14% predict that prices will fall. The percentage of people who predict that home prices will remain the same increased from 30% to 35%. The net percentage of Americans that predict home prices to rise has increased by four percentage points from month to month.
What Is The Fastest Time Homes Will Fly Off The Market in 2022?
In 2022, there's a good possibility that homes will be snapped up again. Most homes were on the market for 21 days in 2020. Now, homes are selling faster and often sell after 19 days. This is good news for sellers looking to sell their homes quickly. Buyers need to be focused. It's important not to drag your feet after finding a home that suits your needs and is within your budget. If you wait too long, it will likely be gone. Before you commit to buying a home, you need to be clear about what you are looking for and what your budget can afford. Every market is different.