Well it’s official: 2022 is here! There have been many opinions voiced on what is to come for the US housing market in 2022, which have left both buyers and sellers are wondering, what’s next? Will there be more homes available to buy? Will prices keep climbing? How high will mortgage rates go? Fret not, home buyers and sellers, we have some answers for you!
January is looking to be the most competitive month in housing history.
The median home sale price surged 16% year over year during the week ending January 9 to an all-time high of $365,000. Here in North San Diego County, median home sale price is closer to $1,100,000. Demand has not faltered, and inventory increases have not covered enough ground to offset the consequential price increases. The number of homes for sale fell to a new low as listings hit the market at a slower rate than they did early last year. Yet homebuyer activity–as measured by the Redfin Homebuyer Demand Index–jumped 9%. Mortgage rates rose to 3.45% during the seven days ending January 13, making homebuying more expensive as overall inflation hit a 40-year high. According to experts, those rates will continue to rise:
Odeta Kushi, Deputy Chief Economist, First American:
“Consensus forecasts put rates at about 3.7% by the end of next year. So, that’s still historically low, but certainly higher than they are today.”
So overall, home prices and rates are rising. Some buyers may feel as though they missed the boat, while they were waiting for prices to go down.
And while this may ring somewhat true, buyers today are not limited to the constraints many in the past have faced. With remote work on the rise, homebuyers can search for homes in more affordable areas without missing out on job opportunities.
Hopefully in 2022, more home-owners will consider listing their home for sale. This would undoubtedly take some pressure off high prices and provide more options for buyers. January has not been promising, but the inventory is forecasted to increase in 2022.
What Does This Mean for Buyers?
Hope is on the horizon. You should see your options grow as more homes are listed and some of the peak intensity of buyer competition starts to ease. Just remember, rising rates and prices are a great motivator for you to find the home of your dreams sooner rather than later so you can buy while today’s affordability is still in your favor.
What Does This Mean for Sellers?
Make no mistake – this sellers’ market will remain in 2022 as home prices are projected to continue climbing, just at a more moderate pace. Selling your house while buyer demand is so high will truly put you in the driver’s seat. But don’t wait too long. With more listings projected to become available, your ideal window of opportunity to stand out from the crowd won’t last forever. Work with an agent who knows your local market and current inventory conditions to ensure you have the support you need to make an educated and informed decision about selling in the coming year.
Bottom Line
If you’re thinking of buying or selling, 2022 may be your year. Let’s connect to discuss your goals and the unique opportunities you have in today’s housing market.