The real estate market has had its ups and downs over the years, but what will it look like in 2022? Will homebuyers have an easier time purchasing their first homes, or will rising interest rates and high prices make it too difficult for them to find the home of their dreams?
For most people, real estate is the largest purchase they'll ever make, so it's natural to want to know as much as possible about what will happen in that market over the next few years.
This article looks at the trends and developments shaping the real estate market in 2022 and provides you with information on what buyers can expect to see when they begin purchasing homes in the next few years.
Real Estate Market Size
According to one study by Zillow says that the United States real estate market, which is currently worth more than $43.43 trillion, will increase by $6.91 trillion in 2021. This enormous value stems from commercial and residential properties, including homes, land, and apartment buildings.
Experts predict that by 2026, the number will have grown to more than $69.90 trillion. Surprisingly, the figure may even be surpassed by 2022. If you're looking to invest in real estate, a strong understanding of these statistics can help you determine when would be a good time to buy or sell.
If you're looking to purchase a home, here's some good news. According to estimates by Zillow, home value growth for the year 2021 has continually broken records. This has happened in the national market as well as several local markets.
This growth is because of low mortgage interest rates translating into historically low prices and COVID -19. In 2022 there will be less of a gap between buyers and sellers than in 2018. Why? It's simple supply and demand. In 2018, there were not enough homes on the market to satisfy buyers' needs. This led to significant price growth.
As more listings enter the real estate market in 2022, we predict fewer people will compete for each property, meaning sales prices will likely stabilise or even drop slightly. As it becomes more convenient for people to sell their homes, purchasing a new one might get easier too!
Mortgage Interest Rates
Mortgage interest is the most crucial factor when buying a home. It is good news that mortgage interest rates are currently at their lowest levels.
This means consumers can afford more houses than they otherwise could with higher-interest mortgages. (Mortgage lenders are also offering better deals). Given the current low price of homes, low mortgage interest rates, and tax incentives, buyers can purchase homes without emptying bank accounts.
However, real estate markets are cyclical, and mortgage interest rates will rise at some point this year (2022). When that happens, it is likely to influence sales volume and prices.
There are two risk factors in the real estate market this year. First, mortgage interest rates are expected to rise in 2022 eventually. Second is the performance of the stock market.
Mortgage growth is tied to stocks, and thus, a dip in stocks will hurt the real estate market. Some investors move towards other investments, such as real estate, when stock markets take a nosedive during recessions. When investors' wealth is affected, they may focus on real estate investment because real estate assets are generally considered more stable than any asset class.
A slower stock market also lowers sales potential, and even if prices are not rising, sales volume reduces, further hurting the real estate market. Real estate investments perform well only when volume picks up, so people buy properties for rental, relocation, etc.
The real estate market will continue to fluctuate, but chances are it'll be better for buyers five years from now. If you're planning on investing in real estate, try not to let any of these factors affect your decision. Make sure you choose a mortgage that works with your budget plans and stay flexible.
You don't have to make an immediate purchase-if anything, wait until conditions are more favourable! As long as you keep up with maintenance, your home can appreciate over time, even if there isn't a housing boom during that time.
Outsource Mortgage Support to FWS
If you are looking for accurate mortgage support that can save you $100K or more on your mortgage, contact Flatworld Solutions today. They will discuss your existing property with you, calculate your home loan, and provide solutions to meet your needs and satisfy all legal requirements.
If interested, reach out to us. We will be glad to help you with your needs.