HOUSING MARKET PREDICTIONS FOR 2021 & 2022
While 2021 faced its fair share of ups and downs, we know one thing to be true: the real estate market not only met expert predictions, it surpassed them, breaking records along the way.
With that in mind, there’s one big blaring question right now: will the 2022 housing market continue to follow same trajectory, or are we facing a possible downturn?
Let’s take a deep dive into what leading real estate experts are projecting for the final quarter of 2021 and what to expect in 2022 so you have the knowledge and confidence you need to succeed.
HOUSING MARKET FORECAST
Whether it’s home prices, mortgage rates or inventory, your clients are probably asking a lot of questions about what to expect in the next couple of months.
Here’s what experts are saying about what’s going to happen with real estate for the rest of 2021.
Interest rates are rising but projected to stay low
One of the biggest drivers for 2021’s booming real estate market was record-low mortgage rates.
Because of this, affordability reached one of the highest levels it has in the last 30 years. Naturally, eager buyers followed.
The good news is, experts are predicting that mortgage rates will remain low for the foreseeable future.
While home prices continue to appreciate across the country (more on that later), the counter of the low mortgage rates means homes are still affordable to purchase, albeit slightly less than it was at the beginning of the year.
Pro tip: Lots of buyers in the market possibly means another year of bidding wars. Make sure to include language about it in your marketing materials and help set expectations for your clients by sharing infographics like this.
Home prices are appreciating slower too
The constant battle between high buyer demand and low inventory in 2021 led to a surge in home values that left everyone scared we were headed for another housing bubble.
There’s no hiding the fact that this year’s home price escalation was a bit excessive. However, it was also just a result of simple economics – high buyer demand coupled with extremely low supply.
As inventory starts to grow, experts anticipate price appreciation will slow.
IS THE HOUSING MARKET GOING TO CRASH BEFORE 2021 ENDS?
All of this leads to the question everyone has on their minds: do all these signs point to a housing market crash?
The answer, according to top real estate experts, is a big “no.”
While memories of the housing crash of 2008 still linger on the minds of many buyers and sellers, today’s market conditions resemble nothing close to what caused it.
Home price appreciation may be high, but it’s also a result of too many buyers and too few homes for sale.
The forbearance situation should be balanced out by the large number of equity homeowners currently have – meaning they can choose to sell rather than foreclose.
Plus, while affordability may be decreasing, historically speaking, it’s still high compared to most other years.