2022 Homebuying Trend Predictions.
Is buying a home on your 2022 goal list? If so, you may be wondering where the housing market is headed and how it will affect your plans.
If you kept an eye on U.S. house prices throughout 2021, you’ll know the year brought record home value appreciation (U.S. house prices were up 18.5% by the end of Q3). It’s anticipated the growth will slow in 2022. Just how much is up for debate. Some experts are leaning toward strong growth – Zillow forecasts 11% – while others expect a lower rate. Redfin predicts growth will slow to 3% by the end of 2022.
To help you get a jumpstart on your plans, we turned to real estate experts to ask what they think is in store for the real estate market. Here are their predictions along with practical tips to help you achieve your homebuying dreams.
Top Homebuying Predictions
We gathered 2022 U.S. homebuying predictions from real estate professionals across the country. As responses came in, three trends emerged.
1. Homebuying competition will remain strong
No matter how home values trend, professionals predict 2022 will continue to be a seller’s market. This is because demand continues to outweigh supply, with the national inventory of active listings down 55.5% in November 2021 when compared to 2019.
“Expect a very competitive market through 2022, with multiple offers on most of the properties you want to buy. Home supply is roughly 58% less than pre-pandemic levels. Available inventory is increasing but the market is still much more competitive than before COVID.” – Bill Samuel, Blue Ladder Development
2. Millennials will be a key buyer segment
The youngest Millennials have hit their mid-20s and are eager to stake a claim. The older members of the segment are getting ready to upgrade to larger family homes.
Known for creative problem solving and a tech-forward approach, it’s predicted these homebuyers will push along a streamlined homebuying process. This includes virtual showings, digital homebuying tools, and easy loan applications.
“Millennials are being creative with their resources. Many need more space for remote work but aren’t yet married. So, they’re buying a house with friends to secure a comfortable home without breaking the bank.”
Bob Scott, Sell Land
3. Remote work will drive location and home feature demand
An increasing percentage of the U.S. workforce is seeking remote positions. It’s likely this trend will influence homebuying. Real estate professionals predict buyers will continue to move outside of urban centers to get more bang for their buck. They also predict buyers will look for dedicated offices so they can reclaim their living spaces.
“Work from home is now the new normal, and it’s putting pressure on the real estate market for larger homes to accommodate for dedicated office space. Families are now looking for an additional 1 to 2 rooms.” – Thomas Jepsen, Passion Plans
Facing Competition? Follow These Steps for a Strong Offer
Don’t let the potential of competing offers scare you from pursuing your homebuying goals. Here are four steps you can take as you prepare to purchase a home in a competitive market.
1. Identify what’s a must-have
Is your wish list growing by the minute as you identify your version of the perfect home? You have every right to be picky. But, if your list becomes too long, you might be short on inventory.
Keep an open mind when it comes to cosmetic items like wall colors, flooring, and landscaping. Have a more critical eye when it comes to location and square footage. While it’s possible, it’s costly to move a building or do a major add-on renovation.
2. Get preapproved
When faced with multiple offers, sellers often lean toward a preapproved buyer. The preapproval gives them confidence the sale will go through.
With a hot real estate market, it’s wise to get preapproved when you get serious about your home search. This way, you can submit an offer the moment you find your dream home. Preapprovals are typically honored for 60 to 90 days, giving you time to shop for the right home.
Axos Bank makes the process quick and easy – you can complete the application online in 10 minutes.
3. If you’re an existing homeowner, consider a bridge loan
If you plan to fund your upcoming down payment with the proceeds from the sale of your existing home, the timing can be tricky.
Many potential homebuyers add a selling contingency to their offer to make the financing work. But including such a clause could cause your offer to be overlooked.
An alternate option is a bridge loan. Bridge loans are typically good for six months, offering a short-term financing solution so you can remove contingencies from the homebuying equation.
4. Partner with a skilled professional
It can be tempting to represent yourself in a home purchase, but real estate professionals exist for a reason.
Lean on the knowledge and expertise of a seasoned professional to create a strong offer. They know the local market trends and can translate that knowledge to help you submit your best offer first. They’re also likely to be aware of inventory before it hits the market and may be able to arrange a viewing before the home is listed publicly.
Additional Homebuying Tips
Buying your first (or second, third, or fourth!) home can be overwhelming. Axos is here to help ease some of your worries.
Explore our library of homebuying articles, including First Time Homebuyers Steps to Success, which breaks down the home purchase process into simple steps.
Finally, prepare before you begin the search so you can enjoy the process and cut down on the stress of finding just the right home.