real estate trends 2022

Real Estate Trends 2022: What you Need to Know

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Wow! 2021 was an amazing year! You might wonder how all this will impact real estate in 2022, with rising costs and so much going on across the country.

Will we see skyrocketing home prices? What will happen to the real estate market?

What can you do to improve the current economic climate? 

These are the top 2022 real-estate trends that you should be following, whether you’re listing your home, buying, or retiring and moving out of the country!

Real Estate Trend #1: Slim Pickings for Home Buyers

This is the most difficult real estate trend to accept. The inventory, also known as the total number of houses not sold, was just slightly lower in November 2021 than the previous year.

This is partly because so many people are trying to buy right now. This is also due to fewer sellers listing their homes for sale. It doesn’t matter how you slice it: there weren’t as many houses to sell in the past year. This made it harder for buyers to find homes.

Don’t worry! We’ll show you what to do if you decide to enter the market.

What do slim pickings mean for buyers?

Low inventory means that you have to be vigilant when house hunting. The best homes are likely to go quickly. The average home stayed on the market for 47 days in 2021. This is 10 days less than last year. It appears that homes will continue to sell quickly in 2022.

This doesn’t give you much time to search for your dream home. Here are some tips to help you find the perfect home in this tight market.

  • Sacrifice certain wants. You can sacrifice some wants if you are unable to find the house that you desire.
  • Extend your search. Are you too keen on the area where you want to buy? It might surprise you at the hidden gems that can be found in less-famous areas. A local real estate agent is the best way for you to find the perfect home.
  • Get preapproved as soon as possible. It is essential to get preapproved for mortgage financing before you start house hunting. It’s even more crucial when there is a low supply of homes. You could allow a buyer to take your home without you knowing it.

What do a seller’s slim pickings mean?

Low inventory can mean less competition when you are selling a house. If your home is located in a desirable area or features buyers desire, you can expect to receive offer letters.

You have a greater chance of selling your home in this market than if it is in a regular market. Your home could be the most expensive on the market and you may have an advantage in negotiations. Enjoy the possibility of receiving multiple offers and choosing the best offer. Also, you can move at your own pace.

If you are buying a home after you have sold your existing home, you won’t likely be the one driving. Before you sell, plan your next home.

home prices rising

Real estate trend #2: Home prices are still rising

Prices are rising in the current real estate market. This is just like grocery prices, gas prices, and pretty much everything else. By 2021, the national median home price had risen to $363,000. However, they have slowed down in the last year as they continue to increase.

Home prices rose almost 23% between April and June 2021 than they were in the same period in 2020. However, home prices rose just 16% between July and September 2021 and July through September 2020.

These real estate trends are likely to continue in 2022. Prices will likely rise more slowly than in the early 2021s, but they will still go up.

Sellers, this should bring a smile to your face! Buyers, don’t worry! We have some tips for you.

What do higher prices mean for buyers?

You must know what you can afford to purchase a house in this market. You must commit to sticking to your budget, no matter what. Don’t succumb to the pressure to purchase because you are tired of seeing other buyers take good homes off the marketplace.

It can be frustrating to wait for the right home within your budget. You’ll be happy you did it when you have financial security instead of the big, honking headache that is a mortgage.

These tips will help you feel confident when buying a house this year.

  • Your monthly take-home income should not exceed 25%. This includes principal, interest, and property taxes. It also includes homeowners insurance. If your down payment is less than 20%, a private mortgage (PMI) may be required. Don’t forget about homeowners association fees (HOA).
  • For a down payment, save at least 10-20%. We recommend at minimum 10% as any less will result in higher interest and fees. You can save money by putting 20% down or more. This will allow you to avoid paying PMI, which is an extra fee that protects your lender (not yourself) in the event you default on your payments. It is possible to save a large down payment. It’s possible to save a large down payment if you are patient and focused. You never know what you might find! It’s possible to save up for a five-figure downpayment by next year.
  • A conventional 15-year fixed rate mortgage is the best option. A 15-year fixed rate mortgage is the best option for a home loan. Rip-offs such as the 30-year FHA, VA, and USDA mortgages, which can cost you thousands in interest and fees, will keep you in debt for many decades. We are not accepting!

Use our mortgage calculator to calculate a monthly payment that your budget can afford. Then, work with an agent who is experienced in finding houses to sell within your budget.

Our free Home Buyers Guide will help you find the right home for you in this market. This guide has all the information you need to purchase a home confidently.

What do higher prices mean for sellers?

You may soon be able to make a nice profit! This is great news, as you will need the extra cash to buy your next house. Work with an agent who is familiar with the current market to get the best deal for your house.

Be patient and wait for the right deal. You might be offered a low price by some buyers. Wait for the offer that offers you the highest profit. When negotiating, remember that the less desperate person always has a better chance.

mortgage rates low

Real Estate Trend #3: The Mortgage Interest Rates are Still Very Low

Recently, the average mortgage interest rate (the percentage charged by lenders on your loan amount) is very low.

The average rate of a 15-year fixed rate mortgage fell to 2.2% in January 2021, which is the lowest since Freddie Mac began reporting it 30 years ago. For the rest of the year, those rates ranged from 2.15% to 2.4%. They rose slightly again towards the end of 2021. Expect them to rise slightly in 2022.

According to economist geeks, the Federal Reserve will raise interest rates by around 3.5% in 2022 for 30-year fixed-rate mortgages. That’s why we recommend only 15-year mortgages. They have lower rates than 30-year fixed-rate mortgages and you’ll pay less interest because they end 15 years earlier. This is a double-edged sword when it comes down to saving money.

Churchill Mortgage is a trusted lender that will help you refinance your home or obtain a mortgage.

What lower rates mean for buyers

Yes, interest rates are currently low which can make it more affordable. Don’t let this pressure you into purchasing a house that you’re not ready for. It’s still a bad deal to get a low-interest rate on a house that you cannot afford.

Keep in mind our recommendations regarding monthly payment limits, down payments amount, and mortgage types (see Real Estate Trend #2), and you’ll be in great shape.

What lower rates mean for sellers

Buyers will be more motivated if interest rates remain low to purchase your home sooner rather than later. If interest rates rise, you can expect your house to remain on the market for a while longer.

Even if you aren’t planning on moving soon, refinance your mortgage to get these low-interest rates and shorter payment terms.

What if I don’t plan on buying or selling a home this year?

You might be thinking, “All this is great but I’m not moving anywhere soon.” Here are the top real estate trends to watch now, we hear you.

1. Through 2022, equity is expected to remain stable.

Experts agree that there is little risk of a downturn in the current real estate market. However, they differ in their expectations about how much things will change. Freddie Mac predicts that home prices will rise by 7% in 2022. According to the National Association of Realtors (NAR), price growth will not exceed 6%.

You still have good news, as you will likely make a good profit if you decide to sell. If you choose to remain put, A higher net worth is a result of having more equity. To ensure that your equity (the value of your home minus the amount you owe) is increasing, continue to monitor it.

2. A real estate market crash looks unlikely.

You might be wondering whether the housing market will collapse, given all the uncertainty surrounding everything that happened in 2020. It’s impossible to predict the outcome, but economists believe that a housing crash will be unlikely.

Despite the low mortgage rates, buyers are more inclined to buy homes, which in turn drives up demand. There is still very little inventory of homes for sale. This makes home buying more affordable and allows for home price growth.

3. No matter where you live, buyers are interested.

Some buyers might be less selective because of the rapid rise in home prices over the last few years. Some buyers may be more open to considering neighborhoods that aren’t easily accessible from major cities or have limited access to the highways. 

You might be wrong if you believe you live in an undesirable neighborhood or that your home is not what buyers want. This is the perfect time to sell your house.

A top-notch agent can help you take control of real estate trends

Partnering with a professional agent can help you take advantage of current trends in real estate, whether you are selling, buying, or moving out of the country!