What Homebuyers Should Expect in 2022

Dallas Homebuyers - The Tuttle Group

Dallas Homebuyers - The Tuttle GroupRealistic expectations are always important for homebuyers, but that’s especially true in today’s unique market. Knowing what’s to come in 2022 can set homebuyers up for success.

Fewer Homes Than Buyers

We expect the real estate market in 2022 to have more buyers looking for homes than homes available for sale. The trend means homebuyers should prepare for a competitive market no matter where they’re located, especially in hot markets. Still, the market won’t be as competitive as in 2021.

We expect the supply of homes for sale to increase in 2022. More housing inventory arriving on the market means the intensity of multiple offers will ease, according to the National Association of Realtors. Though buyers continue to outnumber sellers, the trend offers hope for homebuyers this year.

An Increase in Mortgage Rates

2021 saw historically low mortgage rates. The forecast for 2022 isn’t quite as promising, but homebuyers this year should keep that news in context. Though we expect mortgage rates will increase this year, they will still stay fairly low, even with projected increases. Remember, 2021’s rates were historically low, so even as rates go up, they are still increasing from a lower baseline. Homebuyers can still expect relatively low mortgage rates.

Rising Home Prices — But at a Slower Pace

We expect home prices will still increase in 2022. However, the pace of this increase will be slower than in 2021. Predictions for the increase in home prices range from as little as just under 3% to an increase of over 7%. The single-digit increase in projected gains is less than the increase in 2021 — again offering some hope for homebuyers in 2022 compared to those shopping for a new home last year.

Prepare for Counteroffers

Homebuyers that live in a hotter-than-average market should prepare themselves for counteroffers ahead of time. Homebuyers typically put down between 3% and 20% of the overall price of the house as a down payment. While the larger the down payment is, the better off homebuyers are in the long run, this can be difficult for first-time homebuyers who don’t have another property to sell.

The current low mortgage rates can make houses more affordable even for homebuyers who can only make a smaller down payment, but the competitive market may mean homebuyers have to contend with multiple bids and counteroffers. If homebuyers can come prepared with a good down payment, they will be in a better position to grab their dream home.

Is 2022 a Good Year for Homebuyers?

We expect this year to offer pros and cons for those looking to buy a home. The low mortgage rates mean the cost of borrowing money is very low, so homebuyers can purchase “more house” or pay a mortgage off faster if they go with a shorter mortgage. At the same time, 2022 will likely be a competitive year for buying a home. The competitive market means some homes will ultimately sell for thousands of dollars over the asking price because of bidding wars. 

All in all, 2022 is a hot market with advantages and disadvantages for homebuyers. By knowing what to expect this year, homebuyers can set realistic expectations and position themselves to buy a home at a price they can afford. Contact us to get your questions answered and create a plan for buying a new home.

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