What Are the Housing Trends in 2022?

 What Are the Housing Trends in 2022?

House model on credit card, coin and calculator, installment payment concept.

The COVID-19 pandemic transformed the real estate industry in many ways. Mortgage rates
recorded their lowest in recent years. The prices of homes plummeted while many people chose
to move to new places.
But almost two years later, the housing industry is slowly calming down. The reduction in
infections helped many sectors of the economy, including real estate, to start reopening
After the challenges experienced in 2020 and 2021, the sector is likely to settle down in 2022.
Getting accommodation at accommodations like Jardine or any other place is becoming easier
than it used to be.
Below are the housing trends in 2022:

1. Mortgage rates are likely to rise

Mortgage rates went to a record low in 2020. For example, the average rate for a 30-year
mortgage loan fell to 2.93 in Jan 2021. Almost everyone agrees that mortgage rates will
increase in 2022. According to economic experts, the combination of consumer spending and
rising inflation is pushing inflation rates higher every day.
It is a fact that the record-low mortgage rates were a catalyst in the housing craze that was seen
in 2020 and 2021. Some people believe that it was the single most important factor in the real
estate boom.

2. Inventory will remain scarce

Even before the pandemic struck, there was a high demand for houses with limited supply in the
country. The pandemic made things worse due to labor shortages and issues with the supply
chain. While builders are trying to meet the current demands, inventory will still be a big problem
in 2022.
The number of listed houses for sale dropped to a record low by the end of November 2021,
according to CNBC reports. Although we are likely to experience more listings in summer and
spring as always, it is unlikely that the listing will meet the current demand.

3. Affordable housing remains a challenge

The coronavirus pandemic dealt a blow to housing affordability by taking money away from
some people’s paychecks. Most people who had intended to purchase houses between 2020
and 2021 found themselves prioritizing other things and shelving their ambitions of owning a
house. Other people lost jobs, making it hard to save any money.
The National Association of Home Builders projects that the median cost of all existing and new
houses sold in the US increased from $320,000 in the summer of 2021 to $355,000 in the third
quarter of 2020. Because of the skyrocketing prices, it is becoming even harder for most
Americans to afford homes.

4. Prices will not drop

Anyone hoping that prices will drop because of slowed competition is in for a rude shock.
According to real estate experts, economic trends like low mortgage rates, tight supply and
elevated demand will continue to be an added advantage to sellers. There are bound to be
bidding wars on many homes, especially in the summer and spring. This means that
prospective buyers should not expect any relief in terms of price reduction.

5. iBuyers will not be aggressive

During the pandemic, instant buyers or iBuyers became aggressive buyers in some markets.
This has increased the demand for houses and a subsequent increase in price. Many people
wondered if the premium bids and modest fees offered by companies like Zillow made any
business sense. The company later admitted that the offer was not sustainable and decided to
end a few months down the line.

6. Young buyers will be disadvantaged

Millennials who are at their prime age to purchase homes will remain in a disadvantaged
position compared to older generations as far as buying a home is concerned. This is not
because the prices of homes today are higher than it was during the time of the baby boomers.
It is because boomers tend to stay in their homes longer compared to millennials.

7. Smaller markets will continue to experience a boom

As most cities continue to experience booms, prices are likely to remain high. This will make
other nearby markets more affordable and attractive to buyers. There are many people who are
looking to settle outside the cities and would be easily attracted by such neighborhoods.
The real estate market is going to experience a lot of changes in 2022. This is because of the
effect that the coronavirus pandemic had on the sector over the past two years.

Related post