With mortgage rates and home prices likely to increase, discover what this could mean for home buyers
Buying a home—especially for the first time—can be equal parts exciting and confusing, with a dash of “overwhelming” and a pinch of “this was the best decision ever.” We’ve seen a lot of changes to the real estate industry over the last couple of years, with the housing market exploding like a Fourth of July fireworks show in 2021. As we get ready to head into a new year, let’s talk about a few important things to consider if you’re planning on buying a home in 2022.
Home Buying Trends
One of the biggest reasons for the uptick in home buying that came out of the pandemic has been the desire to be closer to family and friends, when in the past, the most common reason for buying a home in a certain area was convenience to work. According to a 2021 survey of home buyers and sellers done by the National Association of Realtors®, among all buyers in 2020, the amount of first-time home buyers increased from 31 percent to 34 percent, and it shows no signs of slowing down.
The survey also stated that while “first time buyers have had record low interest rates, they have also faced a housing environment that has scarce inventory and rising home prices.”1 Humans are social creatures that crave a sense of community and buying a home that provides proximity to loved ones, especially during times of uncertainty, seems to be part of what is contributing the increase in home purchases.
Home Prices to Increase
According to a housing report by the National Association of Realtors®, “October 2021 brought 6.34 million in sales, a median sales price of $353,900, and 2.4 months of inventory.” The snapshot report also stated that the average home sale price has jumped up 13.1% year over year, with home inventory down 12% from October 2020.
What does this mean exactly? Buyer demand for housing will stay strong going into 2022 but won’t skyrocket. With inventory low and demand high, home prices will increase, but at a slower pace. But even with home prices going up, that doesn’t mean they won’t fly off the housing shelf, so to speak. Quite the opposite. Homes are likely to continue selling like hot cakes despite rising home prices. This is good news for sellers. For buyers, on the other hand, it just means you need to stay focused and not get discouraged. All is not lost!
Mortgage Rates Likely to Increase
The recent decision of The Federal Reserve to begin tapering it’s purchases of mortgage-backed bonds leads many to anticipate an increase in mortgage rates in 2022. But don’t let that scare you into not buying a home at all. While mortgage interest rates are relatively low right now, it’s important to explore every option available to you and to partner with someone you trust to explore your options based on your personal financial situation.
We’re Here to Help
Think of the housing market like seasonal ocean tides. There’s always going to be an ebb and flow, with sellers being on top for a season, and then buyers being on top. This is completely normal, but we understand it can be a lot to take in and wrap your head around.
We’re here to help you find your way through the home buying waters.. There are quite a few ways to get you qualified for a home loan that will meet your lifestyle and home ownership goals. We’ll show you how.
Don’t let the unknown keep you from exploring how homeownership can turn into reality for you in the coming year. Reach out to us today and we’ll help you explore your options and navigate this home buying journey with you.