The real estate housing market is always fluctuating, and it can be tough to keep up with the latest trends. In this blog post, we will dive deep into the current state of the real estate market predictions. If you are a real estate professional or a person who wants to buy or sell a house, you must stay up-to-date on the latest news and trends in real estate. We will discuss various topics, including housing prices, interest rates, etc.
One huge issue is whether the real estate housing market will continue on its upward track in 2022-2023 or whether we’ll see a fall. Knowledge is the most powerful instrument you have to beat your competition in today’s industry. So, let’s take a deep dive into the most recent real estate market predictions for 2022-2023, so you may educate your clients and surpass your goals this year. So whether you are buying or selling a home, now is the time to get informed!
Prediction #1:High-priced houses may face less competition.
Rates on mortgages are rising: Mortgage rates on a 30-year fixed-rate mortgage surpassed 5% recently first time since 2011, and experts predict that they will continue to grow. Most purchasers base their price range on how much they can afford each month, and as interest rates rise, mortgage payments for a particular loan size rise. As a result of the rising mortgage rates, purchasers will have to lower their expectations and start looking in lower price ranges. Another trend is that home prices are rising faster than wages. This is causing affordability to become a real issue in the real estate market.
What about mortgage rates?
While real estate professionals do not anticipate mortgage rates to climb significantly, any increase would result in higher monthly mortgage payments. To most people, a few decimal points may not seem like much, yet they may make or break a budget. Pre-approval is, therefore, such an important step for today’s purchasers.
If you have waiting purchasers, the best advice you can give them is that rising mortgage rates combined with sustained home price appreciation can only imply one thing: they’ll pay more for the same house they’d buy now.
Prediction # 2: Inventory shortages indicate home prices may continue rising
The supply of houses available for sale is low, and even a considerable decrease in demand due to higher rates will not transform this into a buyer’s market. Home prices will keep rising because there aren’t enough houses available to meet demand. Still, the combination of rising home prices and elevated mortgage rates means fewer people will be able to afford to buy.
Moreover, demand will remain high, and so will home prices
Rapidly rising mortgage rates have harmed demand for mortgages since the start of the year, but there’s no indication that demand has plummeted,
The cost of financing a house listed for sale has increased in the last year, that has caused many people to rethink budgets and likely knocked some households out of the real estate purchase market for now
Prediction #3: Warning about the collapse
Many signs show that the real estate housing market is about to collapse.
Many real estate professionals see the economy is getting healthier, yet there are rumblings of a recession beneath the surface. Last year, when consumer prices began to rise, inflation began to rise, raising alarm bells.
In May, the Federal Reserve hiked its federal fund rate due to rising inflation, the first increase in 22 years, signaling a possible slowdown. Higher interest rates could slow consumer spending.
Prediction #4: The suburbs will become more expensive
The fastest-growing locations for home values are comfortable for the big families. This reflects the property market’s impact on Millennial house buyers. As Millennials mature, so does the real estate housing market, and as they get older, we’re seeing them hunt for homes that can accommodate growing families. In 2022, around 200,000 more Millennials will age 32 than in 2021, with even more turning 32 in 2023. Over the next, this group will continue to drive up property prices in first-time buyer neighborhoods.
Prediction #5: The number of renters will rise
Millennials are increasingly marrying and having children, and they need housing. Yes, supply constraints continue to increase, driving up housing and rent costs. With rising mortgage rates, fewer people can now afford a home, forcing them to continue renting.
Unfortunately, construction costs have risen, making it difficult for developers to add more affordable homes to the mix. One approach would be to subsidize builders and reduce developer costs and regulations, but this would be up to local planning commissioners, who may not desire further development.
If you’re thinking of buying or selling a home this year, it’s essential to follow real estate market predictions. By understanding the current market, you can better position yourself as a real estate professional (or your clients) for a successful transaction.