The Rising Cost of Home Ownership

Millions of homebuyers flooded the housing market in 2021. Low mortgage rates plus a low supply of homes across the country made 2021 a great year to buy a home, which explains the surge in demand. However, that (coupled with the coronavirus-inspired flight from heavily populated urban areas to smaller cities) made the cost of homeownership rise significantly.

The price of homes increased by 14.6% in 2021, according to the National Association of Realtors.

According to Kiplinger, the price of homeownership continues to rise in 2022, which means it’s still a seller’s market. Let’s take a closer look at what predictions are forecasted for the remainder of 2022.

1. Increase in Home Prices May Slow Down in the Short Term

One piece of good news for buyers is that the increase in home prices may finally slow down. That means more affordable housing for families like yours. Realtor.com’s chief economist predicts that U.S. home prices will grow 2.9%.

2. Mortgage Rates Will Increase

While this is kind of a given since mortgage rates always fluctuate, higher mortgage rates coupled with the high price of homes will force the market to readjust.

3. Home Prices May Increase Long-Term

While home prices may decrease in the short-term, analysts predict that housing prices will increase long-term because mortgage rates fell temporarily. That led to a surge in offers for homes.

4. Demand Will Continue to Rise

As the population continues to grow, the demand for homes will continue to increase as well. Last June, there were only 1.38 million homes for sale in the U.S., which was down 23% year-over-year, according to Redfin. New homes sales are expected to rise to 920,000 in 2022, up from last year’s 800,000 new-home sales.

Tips for Buyers:

1. Be Prepared to Offer More Than The Asking/Listing Price

In a housing market like this, you have to be prepared to offer more than the asking price if you want your offer to be accepted over other offers. You have to be competitive and play the game to win. That means anticipating that someone just might outbid you.

2. Clean and Stage Your Home

If you want the maximum number of buyers to choose from, consider cleaning and staging your home before open houses. That will make your home much more attractive to potential buyers. You should also try to go on the market on a Friday (which is the best day of the week for home selling).

Tips for Sellers:

1. The Best Time to Sell Your House is in April

If you’re considering selling your home, think about waiting until inventory is the lowest and demand is the highest. According to historical data, there were 12.9% fewer active listings during this period than an average week in 2021, while the average home got 29% more viewings per listing than at any other time of the year.

2. Cash is King

If you can make a cash offer, by all means, make a cash offer. That will look a lot more attractive to a buyer than someone who has to go the traditional mortgage route.

Conclusion:

Knowing when to buy or sell a house can be tricky, but paying attention to predictions when it comes to the housing market can help you understand it and make an informed decision before you buy. Keep the above in mind as you head out on your home-buying journey.