Real Estate Trends 2022 You Need to Know

Wow! 2021 was an amazing year! You might wonder how all this will impact real estate in 2022, with rising costs and so much going on across the country.

Will, we see skyrocketing home prices? What will happen to the real estate market in today’s economic climate? These are the top 2022 real estate trends that you need to be aware of, whether you’re looking to sell, buy, or stay put. Check an area calculator.

Real Estate Trends

1. Slim Pickings for Home Buyers

The inventory, also known as the total number of houses not sold, was just slightly lower in November 2021 than the previous year.

This is partly because so many people are trying to buy right now. This is also due to fewer sellers listing their homes for sale. It was difficult to meet buyer demand because there weren’t as many houses available over the past year.

Don’t worry! We’ll show you what to do if you decide to enter the market. Find the area of the circle using the area of circle calculator.

What do slim pickings mean for buyers?

Low inventory means that you have to be vigilant when house hunting. The average home spent 47 days on the market in 2021. This is around 10 days less than last year.3 It also looks like the homes will continue to sell quickly in 2022.

Expert agents can help you purchase your home.

This doesn’t give you much time to search for your dream home. Here are some tips to help you find the perfect home in this tight market.

Sacrifice certain wants. You can sacrifice some wants if you are unable to find the house that you desire.

Extend your search. Are you too keen on the area where you want to buy? It might surprise you at the hidden gems that can be found in less-famous areas. A local real estate agent is the best way for you to find the perfect home.

Get preapproved as soon as possible. It is essential to get preapproved for mortgage financing before you start house hunting. It’s even more crucial when there is a low supply of homes. You could allow a buyer to take your home without you knowing it.

What do a seller’s slim pickings mean?

Low inventory can mean less competition when you are selling a house.

2. Home prices are still rising

Next: Home price trends. However, they increased at a slower pace towards the end of 2018.

Sellers, this should bring a smile to your face! Buyers, don’t worry! We have some tips for you.

What do higher prices mean for buyers?

Don’t succumb to the pressure to purchase because you are tired of seeing other buyers take good homes off the marketplace.

It can be frustrating to wait for the right home within your budget.

These tips will help you feel confident when buying a house this year.

Your monthly take-home income should not exceed 25%. This includes principal, interest, and property taxes. It also includes homeowners insurance. If your down payment is less than 20%, a private mortgage (PMI) may be required. Don’t forget about homeowners association fees (HOA).

For a down payment, save at least 10-20%. We recommend a minimum of 10%, as any less will result in you paying more interest and fees. You can save money by putting 20% down or more. This will allow you to avoid paying PMI, which is an extra fee that’s added to your mortgage to protect your lender (not yourself) in the event you default on your payments. It is possible to save a large down payment. It’s possible to save a large down payment if you are patient and focused. You never know what you might find! It’s possible to save up for a five-figure downpayment by next year.

A conventional 15-year fixed-rate mortgage is the best option. A 15-year fixed-rate mortgage is the best option for a home loan. Rip-offs such as the 30-year FHA, VA, and USDA mortgages, which can cost you thousands in interest and fees, will keep you in debt for many decades. We are not taking this offer!

What do higher prices mean for sellers?

You may soon be able to make a nice profit! Work with an agent who is familiar with the current market to get the best deal for your house.

Be patient and wait for the right deal. You might be offered a low price by some buyers.

3. The Mortgage Interest Rates are Still Very Low

Recently, the average mortgage interest rate (the percentage charged by lenders on your loan amount) is very low.

The average 15-year fixed-rate mortgage rate dropped to 2.2% in January 2021. This is the lowest rate since Freddie Mac began reporting 30 years ago.8 However, rates started to rise again towards the end of 2021 so expect them to increase slightly in 2022.

Economists believe that the Federal Reserve will raise interest rates to 3.5% for 30-year fixed-rate mortgages in 2022. This is a double-edged sword when it comes down to saving money.

What do lower rates mean for buyers?

Yes, interest rates are currently low which can make it more affordable. Don’t let this pressure you into purchasing a house that you’re not ready for. Still, a super-low interest rate on a house that you cannot afford is a bad deal.

What lower rates mean for sellers

Buyers will be more motivated if interest rates remain low to purchase your home sooner rather than later. If interest rates rise, you can expect your house to remain on the market for a while longer.

Even if you aren’t planning on moving soon, refinancing your mortgage can still offer you the opportunity to get these low-interest rates and reduce your monthly payments.

4. Online Real Estate Services Are Growing

 

• Third-Party Buyers

The new buying trend works like this: Companies like Opendoor tell you about the house that you are selling. They purchase it from you and put money into it to make it more expensive. Then they handle all home processing such as inspections and home showings.

These companies promise less hassle and charge the same commission as agents for selling costs. But it is not all sunshine and rainbows. These companies may charge an additional fee as icing on the cake, which could mean lower profits for you.

Worst, you won’t have the opportunity to work with an agent who is knowledgeable about the local real estate market and could possibly sell your house for more.

• Use a virtual agent

Redfin is a hybrid service that allows you to handle things online and reduce your traditional agent commissions. You get partial services similar to working with an agent but at a fraction of the cost. It’s a compromise between selling your home with an agent and selling it yourself. Be aware of the middle ground when selling your home. Your biggest asset is your home. You get what you pay for.

• Mobile Closings or Online

Digital technology makes it possible to buy and sell documents online. Many home transactions use electronic signature apps and remote internet notarization to speed up the process.

These digital services will be more popular in real estate in 2022. Don’t get too caught up in the latest trend. Use your brain, your money, and a professional real estate agent to ensure you are getting the best deal possible on the perfect house.

5. Risky Buying Options are More Accessible

 

• Rent-to-Own

Some sellers, such as Divvy, offer a rent-to-own agreement if you are desperate to purchase a home. This (bad) deal requires you to rent the house for a time, ranging from several months to many years, before becoming the owner.

Rent-to-own has the advantage of being able to move quickly and without having to wait for a down payment. We know what you think about this. You don’t need to be qualified for a mortgage immediately.

Rent-to-own has the downside that your rent will be more expensive as some of your monthly payments will go towards future homeownership. Rent prices are rising across the country and now is not the right time to pay more.

If you decide later that you don’t want to purchase the house, or something happens to your contract (e.g. you don’t get approved for a mortgage), you won’t get any extra payments back. They’ll have been a waste. You may also have to take care of repairs and maintenance while you rent. This puts you in a vulnerable financial position.

• Get a down payment loan

A personal loan to pay down a down payment is another risky real-estate trend you should avoid. This is the same thing as purchasing a home with zero down payment. The entire house cost was borrowed, but now it’s from two different companies with two different interest rates. This means that you have twice the headaches.

It is not a smart idea to buy a house without any down payment. You should have a down payment of at least 10-20% of your home’s actual value. You will lose your financial goals by paying too much interest and fees if you buy a house that is less than 10-20% of its value. This is a common practice among mortgage lenders, and it could even prevent you from getting the mortgage you want.