The first half of the year has been interesting for the housing market. Many people were surprised by the rising interest rates, while the inventory of homes remained flat.
It’s important to keep in mind that the housing market will continue to change throughout the second half of the year. While it’s not always possible to predict what will happen next, here are some of the trends that we might see in 2022.
Mortgage Interest Rates Continue to Increase
Due to the rising interest rates and the increasing prices of homes, the monthly mortgage payments have increased significantly. According to experts, the rising interest rates will continue to affect the budget of potential home buyers. For people who are still in the market for a home, it’s important to factor the rising interest rates into their budget.
Inventory Will See a Minor Increase
The number of homes that were on the market in late March was almost a million, which is a slight increase from February. But it’s still not enough to create an equal market. It would take around four to six months for the supply of houses to match the demand.
Despite the various factors that have affected the housing market, it’s still possible to see a minor increase in the housing inventory throughout the second half of the year. While it’s possible for sellers to keep their homes off the market due to the pandemic, buyers shouldn’t expect a major increase in the supply of houses.
Spring is usually when the number of homes on the market increases significantly. However, so far, there are no signs of a significant increase in the supply of houses.
Housing Price Growth Will Slow
Home-price growth is expected to slow down in the coming months due to the rising interest rates. Although most agents don’t expect prices to go down, they do believe that the double-digit year-over-year growth rate will likely drop to around 10%.
Although the various factors that have affected the housing market will continue to affect the price growth, it will eventually start to stabilize. One of the most resilient markets is the Sun Belt, which is expected to continue experiencing strong price growth.
Rent Will Continue Rising
If you’re still unsure about buying a home, the rising prices of rental units could make it difficult to find a suitable home. Nevertheless, potential homeowners should avoid jumping into the market, as landlords are more likely to raise rents aggressively for new tenants compared to those that have an existing lease. One of the best ways to avoid excessive increases is to stay in your current lease.
In this tough market, home buyers should avoid getting carried away by the seemingly minor cosmetic details of a house. Doing so could lead to a lowball offer and a deal that’s not ideal for the home. Among the other factors that could affect a home’s price are the number of offers that it receives and the condition of the property. Instead, focus on the areas that are most important to you, such as the location, square footage, and layout. Doing so will allow you to make necessary changes once you own the home.