Anyone who bought or sold a home in 2021 can tell you how crazy the real estate market was. Homes sold in a manner of minutes and for way more than the sellers were asking. While 2022 shouldn’t see the massive price increases and brutal bidding wars that were the norm last year, buying a home won’t exactly be a walk in the park, either. Here’s what you can expect if you’re buying a house in 2022:
Prices Will Go Up
Home values in some areas are up close to 28% compared to the start of 2021. While we don’t expect the prices to continue to increase at such a rapid pace, we can expect them to be about 7-10% higher by the end of the year.
One reason for the continued rise in home prices is the low supply of homes available brought on possibly by delayed construction or the out-of-control short-term rental market. The bottom line is that there are more buyers than there are homes for sale, which increases prices, making it challenging for many couples and families to find a home to purchase.
Interest Rates Will Go Up Too
We’ve been seeing interest rates slowly creeping upward in recent months, which definitely puts pressure on many home buyers. Typically, when interest rates go up, home values come down ever so slightly to compensate for the increased payment the higher rates will cause. However, this isn’t the case in many states since, again, our demand for housing is so high. It would certainly be advisable to get into a home sooner than later to avoid paying more each month.
The same thing is true if you’ve been thinking of refinancing your mortgage. In looking at the way the market has been moving recently, it is expected that rates are only going to continue to go up. However, if you purchased your home or refinanced a couple of years ago, or perhaps your credit has improved, you might still be able to nab a lower interest rate that can save you money in the long run.
If you want to know what rate you’d qualify for right now and all your options, we’d be happy to do a quick check for you – no pressure, hassle-free. Call us at (888) 311-8339
Increased Loam Limits Will Make It Easier To Get Into High-End Homes
Some good news for buyers is that conforming loan limits have increased. The new loan limits are as follows:
- $647,200 for regular one-unit loans (increased from $548,250 in 2021)
- $970,800 for one-unit high-balance loans (increased from $822,375 in 2021)
- $1,243,050 for two-unit high-balance loans (increased from $1,053,000 in 2021)
This is good news for buyers who were coming up a little short on higher-priced homes. Before this increase, those buyers would need to attempt getting a jumbo loan to finance their homes. The jumbo loan requirements are much more challenging to qualify for and can also come with higher interest rates. However, these higher loan limits may also help bump up home values since there will be more competition at this price point.
Not All Doom And Gloom
Even though it may cost homebuyers more this year, the overall buying process should not be as rough as it was in 2021. We are hopeful that buyers will be able to get into a home without waiving most contingencies or getting into tiresome bidding wars with dozens of other buyers. Buying a home in 2022 is still a good idea. The real estate market is strong, and we don’t expect that to change anytime soon.
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