This spring’s housing market may be a little rough…again.
Typically around this time of year, once people have moved on from the holiday frenzy, homebuyers and sellers alike begin to make their way back into the housing market. Unfortunately, that activity will increase each week until March, however, this is good news for home sellers, we have a blog dedicated to why sellers shouldn’t wait any longer to sell. Click here to read.
This year, it’s likely there will be more unease than excitement coming from home shoppers. Last year’s spring housing was arguably the fiercest in history, given the pandemic. Even bidding wars have hit an all time high with almost 70% of homes getting multiple offers in April of last year.
All the being said, it raises a question: Should home buyers expect to find a spring housing market in 2022 that is more favorable than 2021?
In terms of housing supply, the latest reading of housing inventory levels does not look good for would-be homebuyers. As of December, just 1 million homes listed for sale on Zillow which is 17.5% lower from December 2020, and 37.8% down from December 2019, when there were nearly 1.7 million homes for sale. What this implies is that the housing market is tighter right now than it was before in the hypercompetitive 2021 spring housing market.
For interest rates, the big wild card is inflation. The Federal Reserve is expected to increase rates several times in 2022. That’ll push mortgage rates even higher. As of last Thursday, the average 30-year fixed mortgage rate hit 3.45% from 3.1% last month. That’s a substantial increase from the previous 2.65% rate in January 2021. Rising mortgage rates would visibly ice some homebuyers out of the market and could potentially put downward pressure on home pricing growth.
If you’re looking to buy or sell, having the right agent in this competitive market is a must. Contact us at Landon Pacific to help find your dream home or to get the best price for your current home sale. Our aim is to make the stressful market conditions as seamless as possible for our clients.