Did you know that home sales in the year 2020 were the highest in over a decade? A combination of low interest rates and high demand made for the perfect storm of an aggressive real estate market.
You may want to wait a little longer before jumping into the real estate game. Are you thinking about buying or selling a home in 2022? Here are some real estate predictions that can help you decide where to begin in the process.
Higher Interest Rates
Much of the housing market frenzy of 2020 and 2021 was due to historically low interest rates, which allowed more people to get home loans. However, this created an unprecedented demand for houses, meaning that houses sold at much higher prices than they were worth.
To adjust the market, many lenders will start to increase their mortgage rates slowly, which will flatten the demand for housing. This means that more homes will be available to buy, but no guarantee of a low-interest loan.
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Less Demand for Homes
The inevitable rising interest rates will create less demand for homes. However, there will most likely not be a huge crash, as was the case in 2008 and 2009. Rather, the current trend of skyrocketing home prices will slow down over time.
The traditional boom or bust cycle does not apply due to the sharp rise in housing prices, rather than the filling of a bubble over time. This particular housing boom is temporary and will lead to a decrease in demand for houses.
If you want to buy a home but without the housing boom, your best bet may be to wait until 2022 or even 2023. Once the demand fully cools off, you will have a much easier time securing the home of your dreams.
The Covid19 Pandemic
The coronavirus pandemic changed our lives in unprecedented ways through 2020 and 2021. One of the biggest changes many people saw was the switch to working from home at jobs that previously did not allow it.
Even with some companies returning to the office, others made the decision to go fully remote or let their workforce stay remote. Because of this, many workers who lived in areas with a high cost of living are moving elsewhere in the country.
This migration of remote workers will cause a steady increase in housing prices that will occur slowly over time. The pandemic and time with family and friends also made people re-prioritize their lives, which might mean moving somewhere with a lower cost of living.
Be Prepared With These Real Estate Predictions
If you want to buy or sell a home in 2022, then you should not have to go into the process with no knowledge of the market. With these real estate predictions, you can navigate the process as smoothly as possible.
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