It’s been a tough home market for buyers during the past several years. Several factors indicate that the housing market could be getting easier for those looking to buy a new home in 2022.
More Available Homes
There is a chance that more houses could become available on the market. It is expected that some real estate investors could start selling their properties and take advantage of the high selling price of homes today.
The current trend is finding that more houses are becoming available on the market. The trend is expected to continue into next year. The number of real estate listings has increased between 5% and 20% compared to the previous year.
Problems in the supply chain since the pandemic started have created homebuilders to slow down the building of new homes. As the supply chain begins to move again, homebuilders will be able to build more homes. Dropping lumber prices is another positive factor for home builders and those looking to buy new homes.
Baby boomers could start selling their homes once again to size down. High home prices and a lack of inventory have kept many potential sellers from selling their homes because they were afraid they couldn’t find a new home.
Home Prices Stabilize
Home prices have increased dramatically in some parts of the country for the past several years, pricing out many homebuyers who have just given up looking for now. In some areas like Austin, Boise, and parts of Florida, home prices have gained an average of more than 30%. In looking back over 40 years, these gains are historical.
Most economists believe that these gains are not sustainable, and housing prices cannot keep rising at this pace. The current trend is showing signs of a slowdown in these home valuations throughout the country.
Research conducted by Freddie Mac predicts that housing prices will rise slower in 2022. If you’re looking for homes for sale in Lakeland or anywhere else in the U.S., it could become easier to buy a new home.
Rising Mortgage Rates
The Federal Reserve is expected to raise rates in the coming year, which could signal a rise in mortgage rates. Rising mortgage rates could slow down the rapid increase in home prices.
Even though higher rates could mean a higher monthly payment, it also could mean slower home price growth and less competition for potential home buyers. Applications for mortgages dropped 1% in September and are lower by 12% compared to a year ago.
The drop in applications is more about the sky-high cost of a home than about rising rates. Many home buyers have stopped looking because of sticker shock and bidding wars. It is estimated that the average rate for a 30-year fixed mortgage will rise between 3.4% and 4% by the end of 2022.
More homes available on the market and a cooling off of the insane home value increases could mean a better year for homebuyers in 2022.