The real estate market is erratic, chaotic, and completely unpredictable–at least to the untrained eye. However, experienced real estate agents, market analysts, and even advanced data platforms can spot and identify trends in the real estate market–trends that will help you with your property sales and purchases. Below are ten real estate market trends in 2022.
1. Housing Inventory Is Dropping
As of 2022, the housing inventory in the United States has decreased significantly. With the number of homes on the market dropping in the United States, it’s clear that there will be fewer choices and, therefore, more competition among buyers. If you are considering selling your home, you’ll want to sell it while inventory is still dropping so that you can sell it at its listing price.
2. Home Prices Are Skyrocketing
Throughout this year, home prices in most major U.S. cities have risen considerably. Mortgage rates are increasing faster than ever before, and housing is becoming increasingly not affordable for many Americans–especially members of the younger generations (20 to 35 years old) who will eventually face housing expenses that not even their salaries can cover.
3. Mortgage Interest Rates Are Low
The federal interest rates in 2022 are still below the levels they reached in 2007, prior to the housing crash. At the height of the housing crash and subprime mortgage crisis, interest rates rose on average to around five percent. As of 2022, however, interest rates are at their lowest ever–as low as two percent.
4. Online Real Estate Resources Are Growing
There has always been an abundance of real estate information available online, but online tools and resources have never been as advanced and interactive as they are in 2022. For example, smart real estate apps can request satellite images of your home or specific areas around your home that you want to market and sell well before your sale is scheduled to go live. Real estate market data is an incredibly useful tool for businesses and real estate agents who need constant access to housing trends and data.
5. More Risky Buying Options Are Available
Even though home prices are skyrocketing, reckless buyers and inexperienced investors are still purchasing homes to flip on the real estate market. In 2022, real estate investing has become a full-scale industry in the United States. With the increase in lending marketplaces and online mortgages, more people than ever before can take out risky mortgages with relatively low interest rates, even with no down payment. Rent-to-own houses are just one example of a risky buying option that has become increasingly popular this year.
6. The Housing Market Is Competitive
This year, there are more investors and families looking for a home or investment property than there are available properties. As a result of this supply-and-demand imbalance, housing is generally sold or rented at its listing price–not a penny below. There may be room for negotiation in more rural markets, but most cities and wealthy suburbs have a housing market that is very competitive and full of desperate buyers, especially for landlord investors who want to purchase rental properties.
7. Rent Expenses Are Increasing
Housing prices have grown tremendously over the past five years, so more and more people are turning to renting a home or an apartment rather than buying a home. As a result, rents are on the rise. Not only are more people taking out risky mortgages with low down payments, but more people than ever before must rent because they can’t afford to purchase a home. With fewer homes being bought by home buyers this year, there is less competition for landlords looking to fill their vacant rental properties online or in person with renters who have a stable income and good credit scores.
8. Foreclosures Are Occurring More Frequently
Foreclosure rates in the United States have been dropping significantly since 2012, but they began to increase again in recent years. As of 2022, foreclosure rates are almost as high as they’ve ever been due to increasingly unaffordable housing prices and insufficient wages across the United States. If foreclosure rates continue to increase at the rate they are now, we may be in for a housing market crash in the near future.
9. People Are Selling Their Homes for Cash
Cash is coming back in style. Due to less-than-ideal circumstances, such as divorce and foreclosure, many homeowners have been willing to sell their homes for cash in 2022. Several cash home buying companies offer cash deals for homeowners who can’t afford to repair their homes or have a limited amount of time to get through the home selling process.
10. A Housing Market Crash May Be On Its Way
It is unclear whether or not a housing market crash will occur in the near future. But according to several studies and reports, a large percentage of all homeowners with a mortgage say that they can’t afford their monthly payments anymore due to stagnant wages and rising housing costs. Foreclosure rates are increasing every day, and homeowners are feeling the pinch of their mortgage payments each month. Something about the housing market has to change for U.S. citizens to stand any chance of affording housing over the next few years. This indicates that there must be a housing market crash at some point in the near future to compensate for the housing bubble that is currently affecting everyone in the United States.