There’s no lack of activity in 2022’s housing market between a slower stream of new houses, rising home prices, and now increasing mortgage rates. While none of these factors are individually responsible for the ebb and flow of the market, they each impact different groups within the housing economy. Sellers have enjoyed higher sales prices that spark bidding wars and buyers had previously been taking advantage of historically-low interest rates.
With the decision of the Federal Reserve to increase lending interest rates comes a new angle that potential home buyers will have to play from. Budgets are being adjusted and locations are changing in order to provide new homeowners with the space and quality they were searching for initially. Given the recent changes, it’s natural to start wondering what the rest of 2022 holds for the housing market!
Home Prices May Continue Rising
According to the most recent report from the Federal Housing Finance Agency, home prices were up nearly 19% year-over-year at the start of 2022. A large portion of this price increase is from a lack of inventory due to new construction being delayed by the pandemic. Houses are spending less time on the market than ever before which has led to buyers lining up to place their bids as soon as possible.
The higher interest rates being seen at the moment are meant to help slow the speed of inflation for the housing market but demand hasn’t waned at all. Buyers are still able to afford as much house as they need with the concession that the location may need to change. On the other hand, inventory will eventually catch up and housing prices will likely level out or start to dip slightly. In any case, the ball is in the homeowner’s court which means buyers will need to play it smart to lock down their dream home without breaking the bank.
Buyers Should Take Advantage of Every Program
Homeowners are getting the most out of the current market as their home values jump up and create more equity for them against their mortgage. This has led some owners to withdraw from the market completely in order to realize as much gain as possible on their property. Buyers looking to break into the housing market will need to give themselves any advantage possible.
For first-time home buyers, this is pretty straightforward as down payment assistance programs are much more generous when it comes to a first mortgage. No matter how familiar you are with the world of home lending, it’s important to have a team of experienced mortgage agents available to track down the best rates and incentives available in your state.
Don’t Wait for Your Next Home Purchase
Regardless of how the market is doing, purchasing a home is a considerable decision to make. The most important part is ensuring that you aren’t putting yourself under financial stress. Make sure you have an emergency fund set aside and that your mortgage payment will be less than a quarter of your monthly net income.
When you’ve set yourself up for a comfortable home purchase, reach out to the Potempa Team to find your perfect mortgage. Pairing the lowest rates along with any bonuses or incentives is how our agents match you with the mortgage that fits your budget and lifestyle.