This past year, we have seen some crazy housing trends. It’s truly been a seller’s market making it a little harder for buyers to get the house they want. Multiple offers, bidding wars, cash offers, sight-unseen offers, houses going for prices well above asking, etc. If you’ve been in the real estate market, you know the struggles (for buyers) and benefits (for sellers). So what does this mean for the year to come? What's the cause of the housing market changes? Will things remain the same or go up/down?
Mortgage Rates
With the cost of everything rising, it’s predictable that mortgage rates will rise too. In the last year, the low rates caused many people to decide right now would be a good time to refinance, sell, or buy their new home. While mortgage rates are rising, they’re still at an all time low, historically, remaining consistent with the buying and selling trends. Compared to an average high of 12.7%, the current average of 3.5% still seems like a steal to lock in these rates with a new home. But with the prediction of more rising rates, less and less consumers will be looking to the real estate market to buy causing the market to drop back closer to what we consider ‘normal’ sometime next year… or years to come.
Supply and Demand
Low supply of houses available drives up the demand! We all learned about supply and demand in our economics class and we’re seeing it play out in real time. Families are looking for homes, but there are not many available, allowing sellers to list their houses at an appreciated value. Appraisals are ringing in higher than before. Our homes are gaining equity and this is good news for sellers who are receiving not only numerous offers, but many above asking price. But, this causes a bidding war and nearly 70% of homes for sale have been countered by more competitive offers. It appears that despite the new builds going up, there will still be a shortage meaning if you’re in the market to sell your home anytime this year, now’s the time (and if you want awesome listing photography, we know a guy 😉). But there may be less luck in finding your next home.
Homes For Sale
Low interest rates and low supply of houses available are making the market more competitive than ever. The amount of families moving to different size houses or even building a new home is still growing which adds to the sellers market we’re seeing. These families are moving out of their own home, afterall. But families are not only moving houses, but many are moving to different areas both nationally and locally. With this influx in movements, houses are sure to sell. Buyers are jumping at nearly any opportunity and making offer after offer on houses they hope to get.
What does this mean for the rest of 2022?
All this goes to say that things will remain much the same through this year (and maybe years to come) based on these trends. With low interest rates on mortgages and appreciated home prices, homeowners have never been in a better position. This isn’t the best position for buyers, but there are houses out there periodically available. And like most trends, they don’t stick around forever. What goes up, must come down… eventually. It may drop like a feather in the wind or a brick out the window, but only time will tell.