By Gary Stubblefield/ The Stubblefield Home Team of Keller Williams Realty
Let’s face it, the last few years in the housing market have been witness to remarkable trends. Lower-than-average inventory, increased buyer competition, rising prices and historically low interest rates have benefited and bewildered buyers and sellers alike.
So, what does 2022 hold for the housing market? National and local experts are weighing in on what might be in store for buyers and sellers in 2022.
The experts at Fortune magazine, who cite seven industry sources, predict a “perfect storm” of circumstances, ranging from the pandemic, recession-induced low mortgage rates, remote work now inducing buyers to buy further away from their workplace, under-building of new homes and the influx of first-time millennial homebuyers entering into the market. Their take? Home price appreciation of 19.9 percent for the 12-month record between August 2020 and August 2021 can’t be sustained forever.
Fortune followed with thoughts that an increased likelihood the Federal Reserve will raise rates to tamp down inflation. This would most likely not slow down sales but possibly level prices. At the end of the day, the venerable magazine, with reputable sources, could not produce a consensus. Predictions, as we will see, are just that.
Realtor.com provides an interesting number, which may prove to help forecast 2022. Their 2022 forecasts predict the suburbs will continue to see an influx of buyers (most likely to remote working). Millennials with growing families could compose upwards of 45 million new buyers (great news for empty-nester sellers). Adding to the growing list of buyers, estimated at 10 percent, are Hispanic buyers. As usual, the cost of rent will far exceed the cost of homeownership by 7.1 percent. Realtor.com places its growth prediction for home sales at 6.6 percent in 2022.
Overall, national experts expect to see continued home sales growth in 2022 of 6.6 percent, which will mean 16-year highs for sales nationwide and in many metro areas. With more than 45 million millennials in the prime first-time home-buying ages of 26 to 35 in 2022, demand for housing is expected to remain strong. Additionally, a growing economy, combined with declining unemployment, should propel income growth of 3.3 percent by the end of the year, keeping sales levels high despite climbing mortgage interest rates.
On the local level, Kim Cox, the executive CEO of the Ozark Gateway Association of Realtors (OGAR), also weighs in with favorable news for our local housing market’s strength in 2022.
Cox says: “I feel like 2022 will be much of the same when considering the housing market. Currently, we are still seeing a low inventory, as well as that steady stream of houses flying off the shelves. I believe sellers will still have an incredible opportunity to sell their home at fair market value or even above, as well as having multiple offer scenarios. Buyers will most likely still have the task of searching high and low and making lightning quick decisions when they do find what they’re wanting or something close enough to it. I honestly think next year will be much of the same as 2020 and 2021 and look forward to watching the real estate market make a good economic impact for each of our communities.”
The bottom line is this: With historically low mortgage prices and home ownership a better investment than renting, there has never been a better time than now to buy a home. Let 2022 be the year you invest in you!