2022 Real Estate Market Forecast
According to the 2021 market records, which broke the record, most shoppers wonder if they should buy houses now or wait. Most have the hopes that the prices in 2022 will be more affordable.
In 2021 house owners experienced a market in which their property sold rapidly. Numerous homebuyers fought for the winning bid. Despite the economic uncertainty caused by the pandemic in Southern California, many buyers took a severe approach to homeownership.
According to many house experts, we can predict similar trends in 2022 from the previous years. The prices will increase, there will be a low inventory. The waning unemployment rate and increase in home prices will keep the Southern California real estate agents busy in the coming year.
Will Home Prices Increase In 2022?
So what is our 2022 real estate market forecast? According to experts, home prices are expected to rise in 2022. Homeowners will continue to see rapid growth in their home value. According to Nicole Bachaud, an economist, the prices are expected to increase at a high rate in the first few months of 2022. The housing demand will be more in 2022 unless inflation continues to outrun the wages. In such a case, the buyers’ appetite may reduce slightly.
The Home Inventory Prediction In 2022
One of the ways of determining the home prices is by having an overlook into the available supply to demand. Try to look at the monthly supply of homes available for sale and how long the existing records will last.
In 2021 January had the lowest months’ supply of 3.6, and August had the highest of 6.6. although supply in 2021 increased in spring, most experts predict the supply to fall in 2022. Home construction in Southern California is reducing the increased cost of building. The building material prices are gradually increasing, and there is a labor shortage. In 2021 the cost of building decreased a little bit in August before riding again in December.
In October 2021, California’s average home was priced at $722 406, a 21.0% increase year over year (YoY). The figures are expected to rise by 5.2% in 2022. The limited supply and increased home prices may lead to a lower home sale in 2022.
The Effects Of Rising Mortgage Rates On The Housing Market
During the early weeks of the pandemic, The Federal Reserve of The United States (Fed) pushed the mortgage rates down to the lowest levels. It helped ignite the most competitive housing markets in the real estate industry.
On the other hand, the mortgage rates are expected to rise in 2022. These will put pressure on the home price growth and some buyers will be locked out of the market.
Some experts in the real estate market predict that rising mortgage rates will cause a market shock. Some also say that the housing market is stable enough to absorb the shock inflicted on the mortgage rates.
From the above graph, it is predicted that the mortgage rates are expected to increase in the coming years which means potential buyers should think about fast-tracking their home buying goals.
Should You Buy A Home Now Or Wait?
Most buyers are confused about whether to buy a house at this moment or wait for 2022. California’s housing market in the 2022 forecast is still optimistic.
There are many reasons to consider when making decisions. According to many experts, right now is the right time to buy a house. Why is that so? Mortgage rates may rise, rents have increased, and the market won’t crash in 2022.
To those who may not be able to buy a house at this moment, you should be ready and prepared for 2022. Preparation helps to get your dream home when the time comes. When we talk of preparation, this is what we mean. The buyer should get their finances in order, this helps to reduce stress when buying a home. You can start by saving for the down payment, and meeting with mortgage advisors. Most importantly, contact your Pinnacle agent to establish a game plan!