2022 is right around the corner! Lets do a little comparing on a few of the recent housing predictions -
Goldman Sachs predicts that there will be a 16% increase in home value over the course of 2022
Zillow predicts a 13.6% increase in home value
Fannie Mae predicts a 7-7.9% increase in home value
Over the last few years, we saw an average nationwide home value increase fluctuate between 3.3-3.8% year over year. However, with the interest rates being at a historical low over the course of the pandemic that number has jumped significantly.
That being said, inflation rates also increase every year- usually averaging between 1-3% every year. When was the last time you went shopping and thought "Wow this is cheaper than last time!"
Over the last few months our local housing market has cooled off slightly, with homes being on the market for a little bit longer, inventory increasing, and interest rates staying very low.
What does this mean for us today and moving into 2022?
It means that we should not be afraid of buying in our current market, we should TRY to. If we can borrow money that is locked in for 15-30 years with a low interest rate, the average inflation or increase of value on this asset (our real estate purchase) will be more than enough to cover the cost of the loan. So if we are looking for a very safe way to invest our money, real estate is a great avenue. The interest rate will be locked in for 15-30 years all while our home value and inflation rates are increasing around us.
It's safe to say that interest rates will continue to rise as we go on year to year. The Mortgage Bankers Association predicts the average interest rate to reach 4% by the end of 2022.
So the longer we wait, the more the rates, home values, and down payments will continue to rise.
If you or someone you know is considering buying, now is a great time. The rates are still very low, there is more inventory available, and home prices are competitive- but not astronomical.
I am happy to help you find something that not only works for your needs now, but will continue to be an asset to you in the future, because finding a good deal for my clients is my main priority. If you or anyone you know is looking to make a real estate move in 2022 please don't hesitate to reach out to me. I am happy to schedule an appointment and help you get on the right path to a great investment.
Molly Malek, Realtor ®