What will the Housing Market Look Like in 2022?
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What will the Housing Market Look Like in 2022?

What is the housing market going to look like in 2022? Will it be a seller’s market or a buyer’s market? Will home prices keep going up? How does the housing inventory look? 

While nobody can be certain, here are a few things that experts expect to happen this year. 

Home Prices are Expected to Rise in the Housing Market

Just like what we’ve seen over the last few years, home prices are expected to keep going up. This is fueled by several things.  

First , interest rates are going up. Rates that had hit an all time low during the pandemic are expected to rise as the government attempts to combat the growing inflation.If you consider that the average term length of home loans is 30 years, the tiniest adjustment causes thousands of dollars more in interest.

Investors are picking up homes left and right while interest rates are low, which aggravates house prices.By buying the home now while interest rates are low, they’re more likely to have a profitable investment in both the short and long run. 

Finally, Millennials are entering their prime home-buying years. Majority have been in the workforce for a while now, and have likely been saving up to buy their starter home. Millennials are currently the biggest population demographic in the country, after surpassing baby boomers in 2020. 

What does all of this mean? Home prices will probably rise further up as buyers compete to outbid each other on the limited inventory of homes on the market but fortunately,house prices in 2022 are not expected to be quite as bad as they were over the last year.

It’s a Sellers Boom in the Housing Market

The bad news for buyers is that it’s still a seller’s market. Buyers have to compete for the best homes and often enter bidding wars over the asking price. In fact to get the best homes in a sellers market, you have to bid over asking price to even stand a chance. 

The housing inventory is still expected to have shortages. The demand for apartments and single-family homes is outpacing supply, so this deficiency isn’t expected to end anytime soon. This is especially true in the suburbs as more people move out of the city in hopes of getting more bang for their buck . Additionally, now that so many employees can work remotely, there’s less need to live in a big, expensive city. 

For home sellers, the current market offers a lucrative opportunity. You will probably end up with multiple offers. It may be a good time to sell your home and cash in, however bearing in mind that  if you plan on buying a home, it will also be more expensive. This would mean that you would probably need to downsize or move to a less expensive part of town if you want to actually make money on the sale. 

New Homes Aren’t Being Built Fast Enough in the market

Part of the housing inventory issue is a shortage of laborers. Companies across the U.S., from restaurants to manufacturers to general contractors are short on labor. This widespread problem is magnified by virtue of how interconnected industries are. For example, even if a contractor somehow got  all of the labor they need, there are supply shortages that spill over.Manufacturers don’t have adequate labor or raw materials supply the contractors. These labor shortages mean that fewer homes can  be built, thus widening the gulf between supply and demand in the housing market.Housing inventory shortage is prolonged

Conclusion

The housing market in 2022 is bound to be an interesting one to watch. Housing prices will keep going up and we’ll see a shortage of homes on the market. If you’re a home seller, this is great news! If you’re a buyer, it just means that now more than ever, you need someone who knows what they’re doing on your side to make sure you’re able to buy your dream home. Whether you’re looking to sell, buy or both, give us a call at (949) 271-7802 or send us a note. We look forward to helping you navigate these interesting times.