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If you’ve been waiting for home prices to go down before you buy, you might be waiting a long time, experts say.
Although it might be tempting to time the market, it doesn’t look like home prices will be decreasing anytime soon. Prices may rise at a slower rate than the record 20% increase we witnessed at some points last year. But Dr. Jessica Lautz, vice president of demographics and behavioral insights at the National Association of Realtors, predicts that home prices will rise at a slower rate of 5.1% in 2022.
When it comes to buying a home, trying to time the market is risky, especially since experts predict that costs will continue to rise. Many real estate experts agree that by prioritizing your personal finances, you can buy a home when the timing is right for you — rather than waiting for a downswing in the market.
Here’s what you need to know.
Will Housing Prices Fall Anytime Soon?
The pandemic-era housing market has seen soaring prices and fierce bidding wars due to supply chain disruption, low housing supply, and increasing buyer demand. Although real estate experts expect this level of competition to ease somewhat, they don’t predict that house prices will fall anytime soon.
“Our prediction is that home prices won’t actually fall,” says Lautz. “We do expect that home prices will moderate in 2022, but we’re continuing to see home price growth.”
A lack of inventory is one of the reasons behind rising home values, points out Danielle Hale, chief economist at Realtor.com, who agrees that prices aren’t going to decline soon. “The reason why we expect [home prices] to slow but not actually decline is because we still have very few homes available for sale,” says Hale. “In an inventory shortage, the way the market balances that is by pushing prices higher.”
In fact, Hale says that Realtor.com’s data shows that we have 5.8 million fewer homes than we need, a shortage that would take a minimum of five years to overcome. Given this lack of inventory, it seems unlikely that house prices will decrease this year.
Timing the Market: Waiting Out Home Prices Going Down
Instead of trying to time the market, consider basing your homebuying decision on your personal timeline.
“My advice when the homes are in short supply, is if …….