There's one word that can be used to describe the 2021 housing market - crazy! Interest rates were at an all time low, and so was inventory. Potential homebuyers spent months looking for homes to pop up for sale only for them to go into contract an hour after being on the market. So what does that mean for 2022? Are we to expect another year of tug-of-war between supply and demand?
According to Forbes.com, home sales are expected to increase another 6.6% and home prices to rise another 2.9% on top of 2021 highs. We will also see a gradual uptick in mortgage rates, making affordability a concern for millennial first-time homebuyers looking to enter the market.
"Heading into 2022, we still have very good momentum from the low rates and the refinance boom that started in 2020," said Igor Babamovski, Vice President of Residential Mortgage Lending at Telhio Credit Union. "Although most believe that interest rates will keep edging higher, the rise is expected to happen at a slow pace, so rates will still be very attractive."
Additionally, incomes are projected to increase by 3.3% due to the new ways workplaces are functioning, with more employees working from home. This should give potential home buyers more flexibility in their home search, from suburbs to metro areas.
As the market begins to rebalance, we will finally see some increase in inventory, too. "Builders are in full force again, building wherever there is land available, and inventory will continue to grow," said Igor. "The mortgage payments relief programs due to COVID are also going away, and I believe that will result in some additional inventory next year."
At Telhio Credit Union, we are in the business of helping those looking to buy or refinance their home. Learn more about Telhio by visiting telhio.org.
