As 2021 ends and the new year approaches, you may be wondering what to expect from the housing market in 2022. The state of the real estate market is an important economic indicator. It can also determine whether or not someone becomes a first-time homebuyer, moves from the city to the suburbs, or sells their home. The housing market can prompt or delay these decisions.
Whether you’re thinking about putting your current home on the market or are considering buying a home in 2022, there are a few things you can do to prepare. Read on to learn more about what the real estate forecast will bring in 2022.
Home Sales
In 2021, homes were in demand at a level that has not been seen in years. This is due to millions of millennials reaching 30, which is considered a benchmark age for buying a home. This trend of very high demand is expected to rise in the new year, especially as more young people are looking to become first-time homebuyers.
As this generation begins their search for a house, the supply of homes is not projected to meet the demand. Older generations are not selling their homes at the same pace millennials aged 26-35 are in the market to purchase a home.
Expect home sales to continue to rise in the new year as more and more people are looking to buy a new home. Supply and demand also affect the price of homes, which you’ll learn more about in the next section.
Home Prices
The price of homes has skyrocketed in 2021. The record increase in housing prices has been caused by increased demand. The rising cost of houses can also be attributed to the overall lack of inventory and supply chain issues plaguing the overall economy. More people want houses than there are available for them to buy.
While housing costs are expected to continue to increase in the first few months of 2022, prices are projected to steady and return to lower levels of growth in the latter half of next year. This is good news for potential home buyers and those planning on purchasing their first home in the new year. There will likely be fewer bidding wars and more reasonable prices than in the last twelve months.
Housing Trends
Many of the housing trends that were popular in 2021 will continue on into the new year, and that includes for Northeast Ohio real estate. Single family homes in the suburbs will continue to be in high demand as more people are working from home. This trend began in 2020 when the COVID-19 pandemic began and is expected to persist as more companies are allowing employees to work remotely or have hybrid schedules that don’t require them to be in the office every day.
Expect the cost of homes in suburbs in areas further away from cities to increase next year, but not at the same rate as they have in 2021. Homes in the heart of a downtown area may come down in price if they are placed on the market, as well, to meet consumer demand.
First-Time Homebuyers
Although the real estate market will remain a seller’s market throughout 2022, things may be looking up for first-time homebuyers. The number of homes for sale is projected to increase over the next several months. While the real estate market is likely to remain competitive in terms of prices, buyers may have an easier time finding a home than in 2021.
Mortgage interest rates also have an effect on first-time homebuyers and the overall real estate market. Rates are expected to increase next year due to inflation. Mortgage rates change frequently, and higher rates mean that those on the market for a home, especially for the first time, should take this into consideration when creating a budget.
Final Thoughts
2022 is projected to be an exciting year for both homebuyers and sellers. Changing housing trends and home prices are expected to shake the market up, providing more opportunities for first-time homebuyers than in 2021. If you’re considering making a move in the new year, contact an experienced real estate agent from The Katie McNeill Team today to get started. Our team can work with you to plan on buying a home or selling a home and prepare for the new year with these forecasts in mind.
For more information and a deeper dive on this topic, visit the Washington Post’s website.
