Real Estate Trends to Watch Out For in the New Year
The real estate market has evolved through the years as competition for housing has been drastic and rigorous. Home values have skyrocketed, prices have climbed further and further upward, and investors are buying properties in every market.
Will these housing trends continue this 2022, or will we see something completely different? Will the real estate market continue to be on fire? Or will it eventually cool off?
Here's what you can expect in the real estate market this year.
Mortgage Rates Will Rise
Experts feel confident about one thing in the real estate market: mortgage rates will rise. In 2022, they are expected to go up by at least half a percentage point. The hike is in response to the improving economy and inflation, which have been pushing rates upward.
If you're in the market for a new home, it might be worth locking in your mortgage rate sooner rather than later. Keep an eye on the news and rate forecasts to get a sense of where things are headed. That way, you can make the best decision for your family and finances.
Home Prices Will Slowdown
After years of rapid growth, home prices seem to be cooling off at last, and this could be good news for buyers, who have been struggling to afford homes in many markets.
However, it's too early to tell if this is a real turnaround or just a temporary blip. The data is still mixed, and it's too soon to say for sure what's happening. Some experts predict that prices will continue to fall in the coming months, while others predict a modest rebound.
So far, the slowdown seems to affect the luxury market and high-priced homes mainly. In most markets, low- and mid-priced homes are still selling quickly and often at higher prices than last year.
The slowdown is deemed healthy and could eventually lead to a real recovery in the housing market. But we're not there yet, and it will probably take another year or two before we can say for sure that the worst is over. To add up the value, add a marble toilet.
Housing Affordability Will Still Be A Challenge
It is projected that housing affordability will still be a challenge in 2022. This prediction is based on the increasing population and the current trends in wages and prices. Despite the increasing population, wage growth has been relatively slow. In addition, prices for rental and ownership units have continued to increase.
There are a few potential solutions that could help address this issue. One solution is to create policies that encourage more supply of housing. Increasing the supply would help match demand with supply at a lower price point, leading to better affordability overall. Increasing the supply could also help reduce vacancy rates which is beneficial for both renters and owners.
Another potential solution to consider would be increasing housing subsidies to increase affordability across different segments of society. This option has proven successful throughout history, but it does come with a high price tag. A third possible solution includes incentivizing developers to create more affordable housing. It could be done by providing tax breaks or other financial incentives.
Despite the challenges, it is essential to note that there are many ways to address housing affordability. The key is finding the right solution or a combination of solutions that work for the community.
Nonaggressive Instant Buyers
Instant buyers are a new breed of investors looking to purchase properties quickly. They are willing to buy quickly and with cash, which is a huge benefit for sellers in the current market where inventory remains low and homes can be outbid by multiple buyers.
Instant buyers have been aggressive when making an offer on a property, especially if they find a good deal. However, it looks like they won't be as aggressive in 2022 and could even back off due to market conditions.
It is bad news for sellers who are looking to list their homes but great news for buyers, especially first-time homebuyers who have struggled with the high prices of homes on the market today.
Rental Rates Will Continue Rising
As the rental rates continue to rise beyond their current levels, more people will likely be unable to afford a place of their own. In 2022, experts predict that rental rates will have risen by another 13 percent from where they are today.
Meaning, those who currently rent homes should expect even higher monthly payments for their units. If you're one of these people, it might be time to start considering alternative housing options.
You can do a few things to try and offset the rising rental appraisals and rates. First, consider sharing a place with someone else. It can help reduce your monthly payments by splitting the cost between two (or more) people. You could also look into purchasing a home. Although this may seem like an impossible task, it's becoming increasingly more affordable as prices continue to drop.
Finally, you could also look into renting a room instead of an entire apartment or house. It can be an excellent option for those who don't need much space and want to save on rent costs.
In Conclusion
The past year proved to be a seller's market, with bidding wars and steep competition. More buyers were looking to buy a home, but there were fewer available properties. This 2022, experts predict the housing market may slow down after a record-breaking run in the past years.
Daily Bulletin
