The first half of this year was certainly interesting from a housing market perspective. Mortgage inventories remained largely stagnant, but mortgage rates rose sharply, which surprised everyone.
Whether you are looking to buy a home to live on your own, or you Real estate investor When competing for income properties, it’s important to know what to expect from the housing market in the second half of the year. And while I can’t say for sure how things will rock, here are some trends we may see as 2022 progresses.
1. Mortgage rates remain high, but increases should gradually diminish
Mortgage rates have risen significantly since the beginning of the year. This is primarily due to the Fed’s rate hikes. The Fed does not set consumer interest rates, but its behavior generally affects consumers. Further rate hikes are planned for this year, and consumers should expect mortgage borrowing to remain high throughout 2022.
But will mortgage rates rise sharply in the second half, just like in the first half? necessarily. Currently, mortgage rates are at their highest level in 13 years. It may continue to rise moderately, but it is doubtful whether it will rise at the same pace as January-May.
2. Home inventory will increase, but only a little
As of late March, unsold homes had inventories of 950,000 units, according to the National Association of Real Estate Agents (NAR). This is a gradual rise from February. However, the number of available homes is only a two-month supply. And to create an equal housing market, it takes four to six months of housing supply.
As the years go by, there are good opportunities Housing inventory Continue picking up. At this point, sellers are less likely to use pandemic-related uncertainties as a reason to move homes away from the market. However, buyers should not expect a significant increase in inventory either.
In fact, spring is usually a time when a lot of home listings are featured. However, so far, there are no signs that inventory levels have risen significantly.
3. House prices remain high
Home prices are likely to continue to rise, as home inventories are not expected to recover much later this year. This means that many buyers, especially first-time buyers, tend to have a hard time entering the market, especially given the high borrowing rates.
As of the end of March, the median existing home sales price had risen to $ 375,300. That’s a 15% profit on an annual basis. As 2022 progresses, we may see comparable benefits.
Buyers can be on a difficult path
Buying a home may not be easy at any point in 2022, especially if these predictions apply. Buyers need to be patient and flexible when homes are hard to come by, prices rise significantly, and borrowing becomes less affordable, as in 2021.