Trends in real estate occur due to major changes in society from increased local populations to the passing of new real estate laws. All buyers, sellers and investors should understand that real estate trends are volatile and could change at anytime.
Interest rates will remain stable
Mortgage interest rates have remained stable for years with little variation. Whenever the rate changes, it’s a small fluctuation that does not become too high or too low. Since 2021, the average rate has been 3.1% for an average, long-term, fixed-rate mortgage loan. For 2022, the rate is expected to rise slightly but not skyrocket.
Housing prices will increase
Housing prices have increased in 2021 since 2020. The prices are expected to continue rising in 2022 but more slowly than in 2021. Several reasons include fewer home sales and fewer homes on the market so that fewer buyers needed housing by the end of 2021.
Increase in foreclosures
Real estate experts predict the return of homes to the market through foreclosures. The financial industry stalled on foreclosures and wage garnishments due to financial hardships caused by the COVID-19 pandemics. In 2022, there is an expected surge of foreclosures and auctions when more restrictions are lifted.
However, the increase in foreclosures will not result in a housing crisis as seen in 2008. Any major problems are expected to affect homeowners who have been struggling to pay their mortgage since 2021 or for years beforehand.
Rise in Rental Rates
In 2021, rental demands have increased in major cities, and more rental places are being built in suburban areas. In 2021, the U.S. median rate for rent increased by 12.1% due to the increased demands. However, this increase in rates is not predicted to be sustained in 2022.
The new year is also expected to bring a return to evictions, which are increasing every month. Even so, the rates remain low and are similar to the rates before the pandemic occurred.
Predicting trends for 2022
Real estate trends are constantly changing every year. Several factors include changes in the economy, changes in the mortgage or banking industry and the effects of a recent pandemic. Every year, real estate buyers and sellers should review these trends to decide how they should make their next big decision.