What to Expect From the Housing Market in 2022
2021 was not an easy time to buy a house.
Because houses weren’t being built fast enough to meet the high demand of last year’s market, home prices increased.
Supply chain issues, labor shortages, and regulatory practices delaying new home construction contributed to this shortage, simultaneously allowing new real estate agents to thrive in this seller’s market.
So, what’s in store for 2022? Whether you’re a home buyer, agent, seller, investor, or renter, you can expect to see continued high demand, with some return to normalcy.
Here’s what to look out for.
Increases in Home Sales and Prices
According to Forbes, it’s predicted that home sales will increase another 6.6%, with home prices rising another 2.9% (on top of 2021 highs).
First-time buyers prioritizing affordability, primarily Millennials (those between the ages of 26-35), will need to account for this uptick in inflation.
Still, to fulfill the demand of these young households, housing inventory will increase—raising single-family homes by 5% in 2022. These rising home values will also push rent rates, expected to climb to 7.1%.
This increase may either urge first-time buyers to take the plunge sooner or continue renting. And, since housing costs will increase, saving for a down payment may become more challenging.
Gen Zers and Millennials
Expect to see more Gen Zers and Millennials enter the housing market this year.
It’s predicted that more of these first-time buyers will break into the market by buying a “second” home to build equity (while mortgage rates are low). Gen Zers and Millennials may also team up with family or friends to lessen the financial burden.
Plus, with virtual shopping tools like Zillow’s 3D Home® tours, buying a house in a distant location is more accessible—a valuable feature for these generations who prioritize work-life flexibility, travel, and remote jobs.
Home Builder Confidence
According to Zillow, Homebuilder confidence is high, with builders making a sustainable effort to get houses up as soon as possible. Yet, labor shortages and supply chain snags will continue to create delays.
Essentially, there’s a high demand and low supply, which equals a rise in home prices. And even though new construction gains will help, this housing shortage may define the 2022 housing market again.
Higher Mortgage Rates
The Mortgage Reports also urge home buyers to look out for rising mortgage rates.
Even with the housing inventory increasing, higher interest rates (predicted to reach up to 3.75%) could result in less buying power for prospective homeowners.
Housing Market Crash
Experts agree that a real estate market crash is very unlikely because, unlike 2008, current home price appreciation results from supply and demand (not bad lending practices).
This is especially true because post-pandemic, the economy has recovered drastically. As a result, even virtually 100 percent of jobs lost during the recession will recover by the end of 2022.
Is now the right time to become a Real Estate Agent?
The simple answer is yes! A career in real estate can be exciting, challenging, and profitable for those who give it the time and energy it demands. If challenges sound exciting and you’re ready to dive in and start forging your own path to success, while creating your own schedule and being your own boss, this may be the right time for you to make this career jump.
Want to get started off on the right foot? Sea Coast Real Estate Academy offers dedicated courses designed to prepare you for your new career in real estate in North Carolina. Contact us today to get started!