The Real Estate Market Forecast For The Remainder of 2022
As we are now past the midpoint of the year most of us have felt a slight change or correction in the real estate market. For many years we have been in a market that was greatly skewed favoring sellers with inventory levels hovering around one month’s supply where a truly normal market falls somewhere closer to six. This has some asking if it may be a good time to purchase or sell a home. Here are some interesting points covered by experts in the market.
The Mortgage Rate Forecast
Many buyers are feeling the squeeze as mortgage rates have been climbing this year by over 2%. While nobody has a crystal ball to know exactly what lies in store for where they are headed, we can turn to some logic as to why they are rising now. Chief Financial Analyst of Bankrate states “Until inflation peaks, mortgage rates won’t either. Without improvement on the inflation front, we don’t know where the interest rate ceiling will be.” Rates do impact buying power so it is important to heed expert advice from professionals about your specific move.
Housing Supply Forecast
Good news is finally on the table for buyers. Housing supply has been increasing this year due to more homeowners listing for sale but also because rising interest rates have softened buyer demand which results in more inventory. Realtor.com has recently updated their forecast for inventory projections for 2022 from 0.3% to 15% by year’s end. While there won’t be a quick burst of available homes, this steady growth in numbers should make buying a home easier than it has been in the past couple of years.
Housing Price Forecast
A few factors are at play with the trajectory in home prices. Inflation has triggered interest rates to climb, but while that is calling for less buying power, there is still significant buyer demand out there. The same inflation factor drives renters who are experiencing increases to want to buy in order to have more control over monthly expenses with a fixed-rate mortgage. When you add all of this up experts predict that home prices will not see a decline, rather we will see more of a “foot off the gas” scenario. Deputy Chief Economist of CoreLogic states “The current home price growth rate is unsustainable, and higher mortgage rates coupled with more inventory will lead to slower home price growth but unlikely declines in home prices.”
In the end we are seeing more of a market correction rather than any sort of predicted crash. The changes in the landscape are pushing conditions towards more of a balanced market that favors both sellers and buyers.