Home Prices Are Expected to Moderate over the next 12 months. What Does this mean for the Mortgage Industry?

Home Prices Are Expected To Moderate Over The Next 12 Months.

What Does This Mean For The Mortgage Industry?

The Covid-19 pandemic upended the homebuying process. Historically-low mortgage rates coupled with an inventory shortage created a red hot market, with houses selling within hours of being listed, often for well over the asking price. After a year of bidding wars and record-high prices experienced by homebuyers in 2021, the home price growth will slow further in 2022 but will continue to rise. It is advised that homebuyers should expect similar trends to the past two years, such as elevated prices, low inventory, and fast turnaround. scarcity of homes. Covid-19 supply chain issues and a labor shortage have only exacerbated the situation. Despite efforts by builders to increase output, inventory will remain scarce. According to CNBC, the number of homes actively offered for sale reached a new low at the end of November. Even though there will likely be more listings in the spring and summer, there will not be enough to meet demand. While the gap shrank in 2021 and is more likely to narrow in 2022, the housing shortage will be a defining feature of the market again in 2022.

Although it will be a sellers’ market — home values are likely to rise by double-digit percentage points — it will not be as ferocious as last year. None of us can guarantee that [finding] housing will be accessible. However, it seems legitimate to promise it will be less complicated than the previous year. The mortgage industry is likely to experience the following as home prices are expected to moderate over the next 12 years;

INVENTORY WILL REMAIN SCARCE

Even before the pandemic, the country had a

INTEREST RATES WILL RISE

In 2022, the Federal Reserve is predicted to hike interest rates several times, implying that mortgage rates would undoubtedly rise. A 30-year-fixed mortgage rate is expected to reach 3.60 percent by the end of 2022, according to Redfin and Realtor.com, up from 3.30 percent presently. Due to the rising mortgage rates, there would be fewer speculative buyers because there would be less money to be made. The market is going to be profitable and beneficial to the average

individual. Due to the increased interest, people are more likely to buy homes solely to live in them.

COMPETITION WON’T DROP

According to economists from Zillow and Realtor. com, those looking for a slowdown in competition in 2022 are out of luck. Sellers will have the upper hand because of economic trends such as limited supply, high demand, and low mortgage rates.

Many homes will be the subject of bidding wars, especially in the spring and summer. While no one can anticipate what will happen in the future, the tendencies described above indicate that prices may continue to rise. According to Zillow, home values are expected to rise by 11% in 2022, which is less than in 2021 but still significant.

BUYERS SHOULD BE PREPARED

Buyers need to be prepared and ensure that they have done their research ahead of time so you’ll be ready to go when you find the correct listing. When buying a home in the next year or longer, it will be critical to keep an eye on new listings, including ‘coming soon listings,’ and be very prepared to visit the home quickly and decide and extend an offer almost immediately. All of that said, experts say to be prepared. Do your research ahead of time so you’re ready to go when you find the correct listing.

However, don’t overpay. Prices are likely to rise, but that doesn’t imply you should spend more than you can afford. Compare home prices in your neighborhood from the previous year to the listings you’re looking at now.

The increasing number of first-time homebuyers who may require financial assistance from family and friends to finance a down payment is increasing, and it will restrict who can purchase a home. For a long time, housing affordability in the United States has been a problem for buyers, particularly young ones. However, since the pandemic outbreak, the problem has only gotten worse and will continue to do so.

WHAT IF YOU ARE BUYING A HOME FOR THE FIRST TIME?

The Power is Now Media has got you. Chat with Eric Lawrence Frazier, a real estate professional and mortgage advisor. He will inform you what you need to know about the housing market and how to become a homeowner.