How Will The Housing Market Change in 2022
With the build-up that the housing market has seen in the last two years, will these trends change throughout 2022? The answer is yes…we think…maybe. Essentially the housing market is formed and molded with a number of different aspects from the interest rate, market inventory, and even generational income. However, even with all of these factors pointing in one direction, the result may still be entirely different.
Interest Rate
With every year comes new interest rate estimates. For the year of 2022, the estimates do not look great. Due to multiple movements by the US Government, we will see some changes to the interest rate. Although the interest rate was unprecedentedly low, a rise will still affect housing prices to go down to assist buyers in actually affording homes.
Market Inventory
Market inventory is actually predicted to drastically go down. With the number of homes that have been purchased and sold in the last two years, practically 2/3rd of the united states has switched homes. This means that many will be remaining in their homes for a number of more years. This will result in a substantially lower number of houses on the market, and rising prices of homes that are available for sale.
Generational income
Generational income is the amount of wealth that the newest generation holds now that they are moving into the home-buying age bracket. While this number was beginning to look very good, there has been a sudden change in the first month of 2022. A nationwide trend is known as “The Great Resignation”. This is essentially young workers realizing that there are better working conditions than they have, and making the move to companies that care about them. Although this is great for that generation, it is not so great for the housing market. With the movement of income and job changes, delays home buying significantly and will reduce the number of homes purchased by this generation.
Ultamilty, it is very difficult to get a firm grasp on what movement the housing market will make in 2022. However, based on the factors listed above, it may be safe to say that 2022 will be the slow end of the explosive housing boom that we saw in previous years. Although we will most likely not see a market crash, we will certainly see a market decline.