The US real estate market had a record year in 2021, and 2022 will likely be very similar.
Home prices soared across the country as sellers tried to take advantage of demand from potential buyers.
Renters have also seen their rents increase due to inflation.
Experts say these trends are expected to continue into 2022.
Finding the perfect home to buy can be stressful, but combine it with a booming housing market and the search is intensifying even more.
âWe really wanted to have a home and there were challenges finding it,â said Chad Sankow, a recent home buyer in Connecticut.
He and his wife, Charisse, finally found a home they loved after six months of searching. The couple said it was a nerve-wracking process at times.
âThe homes we were looking at sold for almost half the price the last time they sold,â Charisse said. âWe were worried that if prices continued to rise, if we waited longer, would we be able to afford it in the future? “
According to the Zillow online real estate market, 2021 has been one of the hottest markets in U.S. history.
âWe felt a kind of sense of urgency, otherwise we might not be able to get a house that meets our needs,â Charisse said.
Experts say that while 2022 will not be as hot as 2021, house prices will continue their upward trend, but more so due to supply constraints.
“We still have a supply chain, inflation-like costs driving up the prices of new construction,” said Kevin Riordan, real estate expert and clinical specialist in accounting and finance at Montclair State University.
Zillow’s economic research team predicts an 11% growth in home values ââin 2022.
Riordan said housing demand and inflation have also driven rental costs up in 2021. He said this could continue into the new year as well.
“As house prices go up, the ability of people to buy that house goes down because you need certain income levels and down payment conditions to force a cohort of people back into the rental market.” , said Riordan.
So when will prices start to fall again? It depends on the offer.
âIf there is more supply, there could be more downward pressure on prices that way,â Riordan said.
This is especially true in the rental market.
âWe need some kind of supply surge, through some kind of public-private partnership, affordability solutions,â Riordan said.
If you are looking to buy this can still be difficult.
âYou can use affordable mortgage vehicles like the FHA and so on, which have low down payment requirements. Then the problem will become the price of housing itself. Can you find the right entry point? Riordan said.
However, pay close attention to listings in your area and the time of year.
âThere is less housing available during this time, say October through February,â Riordan said.
If you’re putting your research on hiatus, Riordan suggests considering multi-family homes as another option to consider.
âThen you can potentially live in the house and rent part of it as well, which helps subsidize the cost of owning it,â he said.
Whichever route you choose, Chad and Charisse encourage those looking to buy to partner with a real estate agent who is familiar with the area.
They also remind potential buyers not to give up.
âIf this one doesn’t work, it wasn’t supposed to be your house, but we’ll find one,â Charisse said.