The housing market is really different in 2022 than it was in 2008. In the years since 2008, we have seen historic interest rate lows, very high home appreciation and a hot job market. This volatility in the housing market of 2022 has left many homeowners feeling hesitant to buy their next house because they are unsure of what will happen to the housing market in 2022 and beyond.
It’s no secret that the housing market has changed dramatically in the last ten years. In just the first quarter of 2022 we have seen the interest rates go up 2% almost increasing your monthly mortgage payment by 30%. The days of easy money and fast profits are gone, and many homeowners are left wondering if they should buy a house now or wait until the market settles down.
So, what’s the answer?
Unfortunately, there is no easy answer when it comes to the housing market. However, there are a few things that I will share with you that will help you make your decision. But before I answer the gazillion dollar question: Should you buy now or wait? I would like to counter you with two questions. Can you afford the payment with the higher mortgage interest rates on paper? (Talk to your loan officer). And are you comfortable with that payment?
If the answer to both of those questions is yes then here are three reasons why you should buy in today’s housing market.
Buyer demand will start to decrease as Interest Rates rise
As we all know, the housing market in the last two years has been crazy, where you had to bid a lot over asking price and compete against multiple offers. But as interest rates increase you will see a lot of the buyer demand taper off because some buyers will be priced out of the market and some will just not want to buy.
This means that buyers are going to start to back out of the market, which will create less demand and, as a result, increase supply in the market. So, if you’re looking to buy a house, now is the time to do it as there will be less competition and the chances of getting your offer accepted will be much higher.
Rates are not coming down and will continue to increase
The interest rates are not coming down anytime soon, so if you’re planning on buying a house in the next few years, you should do it sooner rather than later. Some experts in the economy are expecting the interest rates to be close to 7% by the end of 2022. The feds are due to meet 6 more times before the end of the year and there are indications that rates will continue to rise, unless we are able to slow down inflation, which at this moment seems very unlikely! So, if you’re waiting for the perfect time to buy, you’re going to be waiting for a long time.
No signs of a housing market crash, yet
The housing market has seen a great deal of volatility in the past decade, with prices jumping up and down and homeowners feeling hesitant to buy their next house. Despite this volatility, there are no signs that the housing market will crash in 2022. In fact, the job market is stronger than ever and homeowners have locked in historic low rates. And unlike the crash of 2008 there is just not enough inventory in the market for a housing crash to happen in the imminent future. Although we are at 8% inflation, the highest it is has been since 1982!
If you’re thinking of buying a home in the near future, don’t wait! The housing market is strong and there are plenty of great deals to be had.
Remember that you are buying this house to live in and you will keep it for years to come, your payment and interest will be locked in for a long term. If you have confidence in your ability to continue to be productive and produce enough income to pay that mortgage payment then it is a great time to buy! Especially while other buyers sit on the sidelines. It is your time to strike that opportunity!
