What a year 2021 has been for real estate! And, now that we’re fast-approaching 2022, we all want to know where the real estate/housing market is headed in the future. Because of the pandemic, the aftermath has been a convergence of historic home buying, a housing shortage, and all-time-low mortgage rates.
Here is what experts expect in real estate for 2022:
Continued home sales growth
2022 will mark a 16-year high in home sales growth nationwide at 6.6 percent. The catalyst: more than 45 million millennials primed (at ages between 26 and 35) and ready to buy their first home. It also helps that there’s a growth in economy and income, and a drop in unemployment.
Continued home sale prices
While home prices are expected to increase in the new year, they will do so at a more moderate pace. Nevertheless, this is still a decade-long pattern of year over year increases. Before the unprecedented market of 2020, the home price increase average was between 4 and 7 percent (the increase was in the double digits in 2020 and 2021). In 2022, the median home sales price is forecast to rise 2.9 percent.
Rental prices will increase at a faster pace than home prices
The rental vacancy rate will continue near historic lows, with between 5.7 and 6.8 percent of rental units available in 2022. And this will then fuel rent growth by an expected 7.1 percent in the next 12 months – slightly higher than the home price growth.
Inventory of homes for sale will rebound
Because homes are selling so quickly, inventory will remain limited, but will grow an average 0.3 percent in 2022. That’s because this past fall showed an increased number of homeowners planning to sell their homes within the next year. A boost in new construction will also help along this trend.
Homebuyers still prefer living in the suburbs
Early in the pandemic, homebuyers were looking to relocate to less-crowded metro areas that offered more space and remote work versatility. This trend is holding steady in 2022. Even though home prices are on the rise in all locales, buyers still know they will get more for their money in the burbs.
Increase in Hispanic homebuyers
The Hispanic population already makes up more than 1 in 10 recent homebuyers, and in 2022, because of the growth of this demographic, so will the homeownership rate. Also important to note: recent Hispanic homebuyers were younger than most homebuyers overall and a majority were first-time homebuyers.
Hope for homebuyers
Sure, it will be a challenging market, with the limited inventory and higher prices, but a competitive labor market with higher paychecks should offset those disadvantages. And, as mentioned, the inventory is expected to rebound – but they’ll still need to make quick decisions because homes for sale aren’t on the market for long.
Home sellers will still have the advantage
If you are ready to sell your home in 2022, you are in a good position. Home listing prices are at a record high, buyer competition is intense, and homes sell quickly in most markets. If you are selling your home in 2022 and you don’t need to buy a place to live right away, you’re at an even greater advantage.
To sit down and discuss your plans to buy or sell a home, please call one of us at the Sands Realty Group at 843.839.4878.
