Housing Market Forecast Heading Into 2022
Since the onset of the COVID-19 pandemic, the housing market has set new records.
Prior to the pandemic, the housing market was remarkably strong. The coronavirus crisis response was unprecedented. The federal government ordered a shutdown of the entire private economy, closing an estimated eighty percent of businesses. It has caused unemployment to soar to at least ten percent, while tens of millions are idled. We are now in a period where we can compare housing trends against the early days of the pandemic when the real estate market was largely halted. With record low mortgage rates and a lack of available inventory, the US housing market’s demand has sustained well over the last year and a half. While affordability concerns continue to grow, low mortgage rates, increased savings, and a strengthening job market all contribute to making homeownership more accessible to a wide number of prospective buyers. However, will the housing market ever crash?
Housing Market Trends
The housing market in particular has been robust this year. With a high demand for homes in almost every area of the nation, the real estate market has transitioned into a sellers market. On the opposite side, it has become a source of worry for buyers in the middle of this epidemic. Home prices have been on the incline for years. However, recent double-digit price increases reflect the convergence of incredible demand and chronically low supply. Low mortgage rates, coupled with more work-from-home possibilities created by the pandemic, have also fueled a rise in housing demand.
According to Realtor.com’s September 2021 national housing report, the market is slowly moving in favor of buyers. While active listing inventory is historically low, homes continue to sell quickly, and listing prices continue to increase gradually over the preceding year, the gap between this year and last year continues to close. This year’s decrease in newly listed houses is the first in five months. These market trends point to a positive development for buyers as we enter the second half of this year.
While median listing price growth is slowing, this does not represent a housing market crash. The share of homes having price reductions increased since months prior, however, the share of price reductions is still almost 5% lower than in 2019. While this is still within normal ranges, it may indicate that some sellers are adjusting prices more aggressively than they have in the last year and a half. The decline in time-on-market has slowed but homes are still being picked up rapidly as demand remains high. For additonal in-depth information and statistics on the current housing market trends, visit a recent article by investor and author of Norada Real Estate Investments here.
Back in March of 2020, the real estate market looked to be headed into a steep decline due to widespread stay-home orders. Since then, homebuyers, supported by low-interest rates, have kept the US housing market afloat. The pandemic has certainly affected every sector but the residential real estate market has been very resilient and it continues to be a pillar of support for the economy. The housing market bounced back in 2020 much faster than other sectors of the economy and has sustained that growth and pace throughout 2021.
While we still face economic and health challenges ahead, it is no doubt that the nation will continue to recover from this pandemic and an improving economy will continue to prop up the housing market competition. Industry experts believe the housing market will remain strong and is set to break even more records in 2021.
The housing market is still hot, but we may be starting to see rising home prices hurting affordability unless the mortgage rates continue to decline as we near 2022. Additionally, even if mortgage rates help blunt the effects of higher home prices on monthly payments, they don’t offset the need for larger down payments and other closing costs as home prices rise.
We are at a point and time where the housing market could go in a multitude of directions. As people continue to sell their home and others continue to search for one to buy, our goal here at Aerial State Media is to assist in the process on both ends. Our job is to provide the seller and realtor quality images to market a listing at its best. While our work also assists the buyer in seeing what is out there for them. For more information, visit Aerial State Media!