Homeownership is a big decision, one that will likely have you spending the next thirty years or so in your home. So, it’s essential to know what you can expect before buying a house. Buying a home in 2021 was different than buying a home before. The housing market went through rapid changes, and most people are not prepared for the new realities of the marketplace. If you buy a house in 2022, here are things to expect.
More Buyers than Homes for Sale
The US homeownership rate is at an all-time low. Gone are the days when many Americans would buy homes. According to a survey by the National Association of Realtors, a house sold in July had an excess of four offers. The house had a mean of 55%, being above the price listed. This shows how homes have more potential buyers than homes for sale. It is expected that if you buy a home, it will be for the long term. Because of this, do not expect to buy at any point when there is excess supply or demand. You need to plan your home purchase based on what’s happening currently and not ahead of time.
High Home Prices
The demand for housing far outweighs supply in most areas of the country. This has contributed to higher home prices, as evidenced in the first half of 2021, and will continue rising. According to the National Association of Realtor’s survey results, there has been an increase in home prices by 23.4% from June 2020 and is expected to increase towards year-end. Unless incomes are rising simultaneously, many Americans will struggle to keep up with these increasing prices.
Mortgage Rates Expected to Increase
The Federal Reserve has been keeping interest rates low; however, it is expected to rise as the year 2021 comes to a close. According to the National Association of Realtors survey, a 30-year mortgage is expected to have a mean of 3.3% towards the fourth quarter of 2021, increasing from an average of 3%, which also states that home prices are expected to increase. With more buyers than homes for sale, rising home prices and mortgage rates will make 2021 a difficult time for first-time homeowners, but it’s not impossible.