Is the housing market ascending or is it on the decline? Is there a risk that rates will continue to rise or that housing prices will continue to appreciate?
Prices are rising due to a mismatch between supply and demand. Many experts predicted that the pandemic would cause a housing crash. However, the market is in far better shape today than it was a decade ago. The housing industry has had a boom last year, with the largest annual gain in single-family house values and rentals, historically low foreclosure rates, and the highest number of home sales in 15 years.
Here's what experts predict will happen in the housing market in the coming months and years. In light of what real estate professionals are forecasting, these are some educated predictions about what the future of the United States housing market will look like. Despite these early signs of a slowing market, it remains as hot as ever for homebuyers, with new records set for home-selling speeds and price increases. The sharp rise in mortgage rates is driving away more homebuyers, but it also appears to be discouraging some homeowners from selling. With both demand and supply falling, the market is unlikely to shift from a seller's to a buyer's market anytime soon.
Rising mortgage rates may take some of the steam out of the market, allowing inventory to rise slightly. It would also slow the rate of home price appreciation and reduce the possibility of a red-hot housing market resulting in an overheated market. There would still be continuous price appreciation, scarcity of inventory, and high demand.
The overarching question is how the housing market is doing and will it crash? The simple answer is that it will not crash in the next couple years. The current trends and the forecast for the next 12 to 24 months clearly show that most likely the housing market is expected to stay robust, with many of the trends that propelled real estate to new heights last year remaining firmly in place this year as well. Last year, homeowners saw a market in which their properties sold quickly and frequently above the asking prices, as numerous home buyers fought for the winning bid.
One of the most widely held housing market predictions for 2022 is that inventory will remain scarce but price appreciation will be slower than it was this year. While spring and summer will likely see an increase in listings, it is unlikely that there will be enough to meet demand. The shortage of inventory has created a red-hot housing market, with homes selling within hours of being listed, frequently for well over the asking price. According to many housing experts, buyers can predict similar trends this year to those seen over the last two years: increased prices, low inventory, and quick turnaround. The main risk to these predictions is rising inflation, which increases the likelihood of near-term monetary policy tightening, increasing mortgage rates, and weighing on housing demand.
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