Despite the worldwide economic uncertainty caused by the pandemic, many buyers took a more serious approach to homeownership than ever before.
It’s no secret that the pandemic turned the real estate market into a wild ride that we are all still on. As a home buyer or seller, most likely, you are eager to know how long this will last and the best decision to make as we go into a new year.
Over the past year, home prices across the U.S. surged while interest rates dropped dramatically. A lack of available inventory and record low mortgage rate have sustained the U.S. housing market’s demand. But ‘how long will it last?’ is the question many have.
The housing market is unlikely to crash in 2022
Assuming the pandemic remains under control, most predict that the real estate surge will not slow down too much in 2022, but it may be more balanced for both the buyer and seller. With increased inventory, home prices should start to moderate, giving more opportunities to buyers. There will not be enough stability in the market for a while to sustain a significant increase in interest rates, but it is predicted to start creeping up. “Right now, we forecast mortgage rates to average 3.3 percent in 2022, which, though slightly higher than 2020 and 2021, by historical standards remains extremely low and supportive of mortgage demand and affordability.” wrote Doug Duncan, chief economist at Fannie Mae, in its latest 2022 outlook.
With increased inventory giving home buyers more options and less competition, the finance buyer should consider home shopping sooner than later to avoid challenges associated with the new high home price and increased interest rate that will eventually arrive.
There are no expectations of a real estate market crash, similar to what occurred in 2008. Home price appreciation is driven by supply and demand — not speculation or bad lending practices like we experienced years ago.
In short, 2022 will give homebuyers more opportunities, but higher rates that eventually will come could give less buying power. Hypotec can help you start the process now, so you don’t miss the opportunity to get in the home of your dreams while rates are at an all-time low. Connect with a local Hypotec loan officer to be your trusted guide close to home. Our team of loan professionals will get to know you and customize loan options to meet your specific needs.