2022 Real Estate Predictions
2022 will be more of the same as 2021.
Heading into 2022, there will be lower inventory than at the end of 2020. With inventory low, and buyer demand high get ready for a busy 2022.
2022 will start with fewer homes for sale than in 2021 and can last into summer. If you list your home for sale and don’t have multiple offers, you will know it is dramatically overpriced.
Many sellers make the mistake of waiting until spring to list their homes for sale. That is not a good idea. Listing in the winter, lets the seller standout. Homebuyers don’t like to wait.
Sellers are slow to list their homes for 2 reasons.
What is happening with Interest Rates
In March 2020 the Fed moved at a rapid pace to steady rates, but also to lower them. They reused the playbook from 2008. They bought billions of dollars in Mortgage-Backed Securities to drive rates to all-time historic lows. Remember, lower mortgage rates allow for more buying power. But now as we are facing an inflation problem, the Fed is going to take its foot off the gas, which will increase rates.
In the first half of 2021, the average 30-year fixed-rate mortgage was 2.8% to 2.9% and now they are consistently back over 3%. According to research, rates will go up modestly in the beginning of 2022 and then likely more by summer. This may cause a decrease in the number of buyers.
But the FHFA announced that the baseline conforming loan limit will increase a record 18% to $647,200, which is an increase of $98,950 from $548,250 in 2021. Making it easier for homebuyers to qualify for higher loan limits!