The increase in the price of homes in 2021 was one for the record books, with an 18 percent increase in prices between September 2020 and September 2021
Now the question on the minds of home buyers and sellers is what’s going to happen in 2022. Will these record price gains continue? Or will buyers grow weary of paying well above asking price? Will the housing shortage continue? Will home mortgage rates, which hit record lows in 2020 and remained low this year, rise? Finally, what can borrowers hoping to buy a house in 2022 do to prepare for what lies ahead?
Possible Home-Price Gains in 2022
Growth in housing prices in 2022 could be much slower, according to Housing industry forecast models. CoreLogic forecasts a 2.7 percent increase in home prices in spring and only up 1.9 percent by September 2022. Predictions from Freddie Mac indicate the overall growth in prices could possibly be 5.3 percent.
Mortgage Rates Expected to Rise
The COVID-19 pandemic and its influence on low mortgage rates, higher cost for building materials and a smaller labor pool to build houses, remote work and a desire for better home office options, and more millennials seeking their first homes have contributed to the housing shortage. But mortgage rates are expected to rise in 2022, according to the Mortgage Bankers Association. An increase in interest rates from 3.1 percent to 3.3 percent could possibly happen as soon as the first quarter of 2022.
3 Ways to Prepare to Buy a House in 2022
While forecasts on the upcoming housing market are just predictions based on current trends, this is the time to prepare if you hope to buy a house in 2022.
- Get your finances in order. Work on that credit score. A higher credit score will often help improve your chances for a loan and could factor in a lower rate, impacting your monthly payment.
- Save. Save. Save for that down payment. When housing prices rise, so do down payments. Start researching housing down payment programs to see if you qualify.
- Take advantage of a pre-approval process so you will know how much house you could afford.
Contact Wyndham Capital Mortgage today to learn more about an online pre-approval process or our Priority Purchase Program.