To say 2021 was a crazy year in real estate is an understatement. House prices increased, loan rates decreased, and as a result, a lot of inventory moved quickly.
But what does 2022 have in store for us? Here are some of the predictions that industry leaders have released.
Mortgage Rates. In January 2021, the average rate on a 30-year loan fell to an all-time low of 2.93%, according to Bankrate. Nearly everyone expects mortgage rates to climb in 2022. The Mortgage Bankers Association expects the average rate on a 30-year loan to reach 4% by the end of 2022.
Home Prices. From March 2020 to June 2021, the median price of homes sold by realtors increased 29%. Because that type of growth is not sustainable year over year, experts predict that prices will stay where they are – and most likely not go down.
Home Sales. Realtor.com chief economist, Danielle Hale predicts that home sales will increase another 6.6% in 2022. With the demand from Millennials increasing, builders are expected to ramp up production, increasing single-family starts by 5% in 2022.
Income Changes. A competitive jobs market is going to help all home shoppers. Incomes are projected to increase by 3.3%, and with employers looking to attract and retain top talent without impacting costs, workplace flexibility will continue. Potential home buyers will be able to broaden their search and move further into the suburbs.
Renovations. As prices and mortgage rates rise, many homeowners will opt to upgrade their existing home rather than buy a new one. A Zillow survey of homeowners found that nearly 75% would consider at least one home improvement project in the next year. The top rooms on their list – bathrooms (56%), kitchens (46%), adding or improving their office space (31%), or finishing a basement or attic (23%).
If you are in the market to buy or refinance a home, and you want to ensure you are making the best financial decision, contact one of our loan officers today. We’ll speak to you one-on-one to find the best solution to fit your situation.