Housing market

Will the Housing Market Crash in 2022? – Yahoo Lifestyle

Summary

Historically low mortgage rates and droves of people working from home due to the pandemic made the housing market red-hot this year. Demand was high and supply was low, leading to a hyper-competitive market where more than half (54%) of homes sold above list price, according to a report by RedFin.

“The speed of home sales and price appreciation was staggering, almost regardless of location, because the strong housing market fundamentals leading into the pandemic were supercharged by lo…….

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Historically low mortgage rates and droves of people working from home due to the pandemic made the housing market red-hot this year. Demand was high and supply was low, leading to a hyper-competitive market where more than half (54%) of homes sold above list price, according to a report by RedFin.

“The speed of home sales and price appreciation was staggering, almost regardless of location, because the strong housing market fundamentals leading into the pandemic were supercharged by low mortgage rates and big savings rates,” says Skylar Olsen, principal economist at digital homebuying platform Tomo. But will the market stay hot through 2022?

Competition seems to have slowed down a bit—RedFin reported that competition on offers written by their agents hit a record low for the year in August, going from about 74% in April 2021 (a record high), to 58%. “Expect much less competition pressure, but don’t expect prices to come down anytime soon,” says Olsen.

Here is what experts predict about the likelihood of the market crashing in 2022, and housing market trends to expect in the year ahead.

The housing market is unlikely to crash in 2022.

While no one can say with absolute certainty, the signs don’t exactly point to a big housing crash in 2022. “Population demographics, a decade-long shortage of new construction homes, and the state of the U.S. economy are all present factors that will prevent a housing crash from occurring in the near future,” says Chuck Vander Stelt, a real estate agent based in Indiana. Vander Stelt claims the conditions that cause a crash are not present, and probably won’t be for a while. “There are far too many people coming up in age, and certainly many already there, that want their own place to live,” he explains.

According to the latest projections by Fannie Mae, 6.8 million homes, both new and existing, are expected to be sold by the end of 2021. Next year could see more of the same demand and price increases. “While we don’t have a crystal ball, 2022 may look a lot like this year and be led again by the supply vs. demand equation,” says Sherry Chris, president and CEO of Better Homes and Gardens Real Estate. “Fannie Mae is calling for 5.6 million existing homes to be sold in 2022, a slight decrease, but a 13% increase in new home sales to 893,000. Home prices are also expected to rise,” adds Chris.

Another factor contributing to the strength of the market is that the majority of homeowners have positive equity in their homes, says Chris. “Attom Data Solutions reported that those who sold their home in the first quarter of 2021 made an average of $94,500, a 44.9% return on their original price,” she says.

Tighter lending requirements at banks have increased home equity, says Nik Shah, CEO of Home.LLC, a company that provides down payment assistance …….

Source: https://news.yahoo.com/housing-market-crash-2022-185829979.html