The housing market is a constantly changing landscape, and it can be hard to predict where it’s going. However, there are some things that home buyers should be aware of as we approach the end of 2022.
Inflation and recession could make the market more difficult to navigate, so it’s important to be prepared for whatever comes your way. The Mortgage Reports spoke to a group of industry experts to get their take on what home buyers can expect in the coming months.
How does a recession affect homeowners?
The U.S. has recently entered a recession, which is defined as at least two consecutive quarters of negative growth in GDP. This recession is unique in that it doesn’t have a specific cause, like the housing crash of 2008. However, each recession has its own impacts on industries differently, and this one is no exception.
For prospective home buyers, it’s important to weigh what this specific recession means for the housing market. Some experts believe that this recession won’t be as bad as the last one, but it’s still important to be aware of the potential risks and make an informed decision before buying a home.
Is the market in a “cool down”?
The housing market is still recovering from the frenzy caused by the rock-bottom interest rates of 2020 and 2021.
As mortgage rates rose this year, affordability fell and reduced the number of active buyers. Higher rates also helped bring more balance to the marketplace. Softened demand has slowed the rate of home price growth, boosted inventory gains, and given buyers some bargaining power.
The question now becomes whether this is a trend expected to continue or just a blip on the radar.
What is in store for the market during the fall and winter?
The typical real estate seasonality says that fall and winter offer great opportunities for purchasing a home. Sellers who list later in the year and those with listings that didn’t sell through the summer are normally more willing to negotiate. It’s also the time when inventory usually peaks, giving buyers increased options and, in turn, diminishing demand.
What will interests look like as the year continues?
The mortgage rate rollercoaster of 2022 was very dramatic. The average 30-year fixed rate mortgage went up from 3.22% to 6.02%. This happened because the Federal Reserve took aggressive action to reduce inflation, which caused a lot of wild fluctuations in interest rates.
Many factors will determine how mortgage rates move in the future. However, it is always a good idea to lock in a home loan and buy a house as long as you can afford it.
Is 2022 a good time to buy a home?
Even though the economy is not doing well and inflation is making interest rates go up, it might still be a good time to buy a house. The market has shifted more in favor of buyers recently and is likely to stay that way for the rest of the year. Plus, if you lock in a good rate today, you can save money by shopping around or buying points.
If you are ready to start looking for a house or are undecided, talk to a lender or real estate professional today to figure out what you need to do next.
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