Do you want to know what is current market conditions in real estate? If your answer is yes then this blog provides you all information regarding this.
Wow, the year 2021 was a whirlwind! With so much going on across the country and costs rising, you might be wondering how real estate will be affected in 2022.
Will property values continue to skyrocket? In the current economic scenario, how will the real estate market fare? Here are the real estate trends to watch in 2022, whether you’re selling, buying, or remaining put!
First Real Estate Trend : Home Buyers Have Limited Options
Okay, this is perhaps the most difficult real estate trend to stomach, so get ready: Inventory is at an all-time low! In November 2021, inventory (the total number of unsold properties) was down just over 16 percent from the prior year. 1
That’s partly due to the fact that there are a lot of people looking to buy right now. It’s partly due to the fact that fewer people are putting their homes for sale. 2 Whatever way you cut it, there were fewer houses for sale this year, making it more difficult to meet buyer demand.
But don’t worry; we’ll go over what to expect if you go into the market.
Second Real Estate Trend: Home Prices Continue to Rise
Then there’s the subject of property price patterns. Prices are rising in the present real estate market, just like they are in groceries, gas, and pretty much everything else. By the end of 2021, the national median home price had risen to $363,700! 4 However, at the end of the year, the rate at which they’re increasing slowed.
Home prices increased about 23% between April and June 2021, compared to the same period in 2020.
5 However, from July to September 2021, housing prices were only 16 percent higher than they were from July to September 2020. 6
Both of these real estate trends are expected to persist in 2022: Prices will likely rise more slowly than in early 2021, but they will continue to rise.
This should put a great grin on your face, sellers! Hold on tight, buyers—we’ve got some suggestions for you as well.
Third Real Estate Trend : Mortgage Interest Rates Are Still Extremely Low.
Recently, the average mortgage interest rate (the fee charged by lenders as a proportion of your loan amount) has been very low.
In fact, in January 2021, the average rate on a 15-year fixed-rate mortgage fell to 2.2 percent, the lowest since Freddie Mac began reporting 30 years ago!
7 For the rest of the year, those rates fluctuated between 2.15 percent and 2.4 percent. 8 However, they began to rise again at the end of 2021, so expect them to rise slightly in 2022 as well.
In 2022, economists predict that the Federal Reserve will raise interest rates for 30-year fixed-rate mortgages to roughly 3.5 percent.
9 That’s one of the reasons we only recommend 15-year mortgages: They have lower interest rates than 30-year mortgages, and because they are 15 years shorter, you will pay less money in the long run. When it comes to saving money, that’s a one-two punch!
Talk to our friends at Churchill Mortgage if you want to refinance or receive a mortgage from a reputable lender who genuinely cares about helping you pay off your property quickly.
Fourth Real Estate Trend : The Growth of Online Real Estate Services
You’ve probably heard of real estate websites like Zillow, which allow you to search for and list houses for sale online. But did you know that there are now internet services that can buy and sell your home for you?
Buyers from outside the company
The new iBuying trend works like this: You inform organisations such as Opendoor about the property you wish to sell. They buy it from you, invest some money in it so that it may be resold for a better price, and handle all of the home processing details such as inspections, repairs, and showings.
These companies offer you less effort and sell your home for around the same price as an agent commission—but it’s not all rainbows and sunshine. Some of these businesses charge an additional service fee (the icing on the cake), which means you’ll make less money.
Worst of all, you won’t have the advantage of dealing with a top-tier realtor who understands the current real estate market in your area and can help you sell your property for more money.
Making Use of a “Virtual” Agent
By handling things online, hybrid businesses like Redfin strive to cut traditional agent commissions. This provides you with partial services that are comparable to working with an agent but at a lower cost. Consider it a compromise between selling with an agent and selling on your own. When it comes to selling a home, though, the middle ground should be avoided. You get what you pay for when it comes to your home, which is your most valuable possession.
Closings through mobile or online
In related news, digital technology facilitates the virtual purchase and sale of documents. Many residential transactions, for example, now rely on electronic signature apps and remote online notarization to speed up the process. 10 To put it another way, you could purchase or sell a home this year without ever leaving your car or changing out of your robe and slippers.
In 2022, you may expect to see more of these trendy digital real estate services. Just remember not to get caught up in every new fad: use your head, your budget, and a smart professional real estate agent to ensure you get the best bargain on the perfect house for you.
Fifth Real Estate Trend : More Risky Purchasing Options Are Available
Let’s have a look at some other “innovative” ways to buy a house that are now popular (but beware!).
If you want to buy a house but can’t afford it right now, some sellers, such as Divvy, offer a rent-to-own option. You agree to rent the home for a period of time—anywhere from a few months to several years—before becoming the owner in this (poor) transaction.
Rent-to-own has the advantage of allowing you to get into a home quickly without having to save for a down payment. (However, you already know how we feel about it.) Furthermore, you are not required to qualify for a mortgage straight away.
The disadvantage of rent-to-own is that it raises your rent by allocating a portion of your monthly payment to future homeownership. Now is not the time to spend even more because rent rates are rising around the country!
You won’t get all those extra payments back if you later decide you don’t want to buy the house or if something goes wrong with your contract (like you don’t get accepted for a mortgage). They’ll have been a waste of time! Furthermore, even if you are renting, you may be responsible for repairs and maintenance. This approach puts you in a financially precarious position.
Bottom line: Don’t buy a house if you can’t afford it right now. Continue to save for that down payment and wait until you have all of your financial ducks in a row. If you’re prepared to put in the effort, it’ll happen sooner than you think!
Loans for a Down Payment
Taking out a personal loan to make a down payment is another dangerous real estate trend to avoid. That’s the same as putting no money down on a house. You borrowed the entire amount to buy the house, but from two different companies at two different interest rates (which means twice as many headaches).
Putting no money down on a house is never a wise idea. Remember that you’ll need a down payment of at least 10%–20% of the home’s value. Buying a home with less money would deprive you of your other financial goals by forcing you to pay too much in interest and fees. Thankfully, few mortgage lenders allow you to do this—in fact, it may prohibit you from receiving the loan amount you require.
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