Spring is the prime time for the housing market. In 2021, existing house sales reached about 6.12 million, which has been the best it has been in the past 15 years. However, new houses sold were only 770,000, which was below the sales in 2020. This was partly due to the labor and material shortages, which made it difficult to construct new homes. The demand for homes is still strong today, so some analysts believe that 2022 could be another good year for the housing market. However, with rising mortgage rates and declining affordability, some analysts believe that the market will return to pre-pandemic levels. The housing market could face higher mortgage rates, higher prices, and a slower rate of sales, which would allow the market to cool.
It is predicted that prices will rise by 9%, which is higher than the 6.6% prediction made in the latter part of last year. 43% of homebuyers are between the ages of 23 to 31, which is up by 6% from 2021. 51% of homebuyers are choosing suburban areas, and 20% are choosing smaller towns. In 2021, new houses 31% of new houses were under $300,000. Today, however, only 18% of new houses are sold below $300,000. Due to the rising prices and high borrowing rates, more buyers could enter the market for fear of missing out. Old sellers that want to downsize could use this as an opportunity to get a high price for their house.
https://www.usnews.com/news/national-news/articles/2022-03-29/it-may-be-now-or-never-for-spring-homebuyers-amid-rising-prices-and-higher-mortgage-rates
No question the housing market has been exploding. I saw an article today that mentioned how even mobile homeowners are paying more. If the predicted prices increase (rise by 9%) turns our accurate, these prices will be scary.
ReplyDeleteI certainly hope that the housing market can relax within the next decade. As we graduate and eventually become homeowners, not paying the prices at the current market level would be quite amazing. I'm sure that even people trying to move/downsize are feeling the market impact.
ReplyDeleteI believe that we can expect the housing market could start to settle. In our newsletter we noticed that mortgage rates and housing prices have been increasing significantly making it harder for consumer to afford. I believe that another factor of this is the expectation of increasing interest rates, this will discourage consumers from spending.
ReplyDeleteIt's a little unnerving to consider that housing prices are so high and interest rates are on the rise. For the sake of homebuyers, the market should hopefully cool off soon. If prices remain high even through Fed rate hikes, first time homeowners may be in for a difficult time.
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