The real estate market has been nothing short of a wild ride for both buyers and sellers since the start of the coronavirus pandemic. Record price appreciation, rock-bottom mortgage rates and cutthroat competition among buyers have prevailed for the better part of two years.
The good news, experts say, is that 2022 may finally bring more equilibrium to the industry. It may not be fully back to the pre-pandemic normal, but it should be a little less crazed.
Here are the key trends to look out for if you’re considering buying or selling property this year.
Mortgage rates will rise
Mortgage interest rates reached all-time lows in early 2021, with new 30-year fixed loans averaging less than 3 percent in some weeks.
Bankrate has a full analysis of what to expect from mortgage rates this year, but the key thing to know is that those record lows are almost certainly behind us.
“Mortgage rates are expected to slightly move up, to an average of about 3.5 percent,” Gay Cororaton, senior economist and the director of housing and commercial research with the research group of the National Association of Realtors (NAR) says.
And while that means refinancing opportunities for existing homeowners may dwindle in the new year, borrowing will still be affordable for most new buyers.
“That is still low by historical standards,” Cororaton said. “Prior to the pandemic, mortgage rates were hovering around 4 percent.”
Smoother supply chains mean more home sale listings
Part of the reason for the hypercompetitive pandemic housing market was builders struggling to get materials as global supply chains slowed. That meant newly-built homes were slow to come on the market, which was compounded by hesitance on the part of existing homeowners to list during lockdowns.
“We still have historically low inventory levels because things are selling faster than we can keep pace,” said Jim Napier, CEO and principal broker for Napier Realtors ERA.
Assuming the worst days of the pandemic are behind us, home inventories should grow in the year ahead.
“Barring any major resurgence of the pandemic that could lead to closing of manufacturing plants, we expect supply chain issues to ease in 2022,” Cororaton said.
“That will start bringing more rooftops to the market, which will hopefully help things a little bit,” Napier added.
Aside from newly-built homes, existing homeowners …….