If you’ve been following the real estate market, you probably know that it has been many months since buyers and sellers enjoyed anything like business as usual. Record-low mortgage interest rates and an even lower inventory was the perfect environment for sellers. It’s now a new year and we can start to envision a return to a real estate market that’s a little more like normal. Here are my 5 predictions and housing forecast for 2022.
NORTHERN VIRGINIA HOUSING MARKET
- Home Prices
Home prices are still expected to remain high in 2022. The difference will be the rate of price growth. While price increase of homes was between 10 – 15 % in the last 2 years, Fannie Mae predicts appreciation will be around 7%. This will be a more normal growth that is expected. As prices continue to rise, it affects home affordability and may result in a less heated market. This means less multiple offers and less a need to waive contingencies to compete with other buyers. This is good news for qualified buyers hoping to purchase a home in 2022.
2. Mortgage Rates
Interest rates are expected to continue to go up. Still rates will be historically low. Coupled with inflations, this affects purchasing power and some buyers will no longer be able to afford to buy a home.
3. Buyer Demand
With buyers facing higher mortgage rates, inflation, and higher home prices, I predict there will be less people looking for homes to buy. Still, for those that can face these challenges and as inventory improving, this will be a great time to start looking. As the market opens up, we may also see fewer offers and more days on the market, providing buyers with a reasonable opportunity to ask for sensible concessions, like needed repairs or timelines that work for both parties. If you are interested in buying in 2023, be sure to see this article “Don’t Forget to Budget for a New Home“.
BOTTOM LINE
The housing forecast for 2022 is positive. A more balanced market seems to be on the horizon.
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