2021 Housing Market
The U.S 2021 housing market has had an insane year. With an estimated 6 million homes sold, it is recorded as the highest in 15 years. The home prices skyrocketed 20% compared to last year. And in some hot markets it even doubled. Houses were also selling quickly, bringing more competing bids and cash offers. It didn’t matter the shape of the home; people were buying anything. It was great to be seller buy not so much a buyer. Here’s a recap on the 2021 housing market.
No More low mortgage Rates
The year started with record low mortgage rates. They were an average 2.65%. Needless to say, that did not last long. By April 1st it had reached 3.18% and the rates keep fluctuating. Experts are predicting the rates to move even high in 2022. “Lawrence Yun, chief economist at the National Association of Realtors, expects the 30-year fixed mortgage rate to increase to 3.7% by the end of next year, but noted this will still be lower than the pre-pandemic rate of around 4%” (Anna Bahney).
Small Inventory
We are currently seeing right now how little inventory is on the market. More people are looking to buy making this market high in demand. This is pushing homes to skyrocket and allowing sellers to receive over asking amounts on their homes due to the competitive bids. More buys are offering all cash than ever seen before. It is predicted in 2022 that the inventory will improve but not by much.
Home Prices will keep skyrocketing
Due to such low inventory in the 2021 housing market and people biding on almost every home, home prices will continue to keep rising. Compared to last year the market is up 13.9% and new construction is up about 19%. It is expected for the market to keep rising in 2022. Experts believe it will in by 5.7% in this upcoming year.
First-Time Challenges:
The housing market of 2021 theme was cash buyers and low inventory. This theme isn’t going anywhere in 2022, making it extremely hard for first-time buyers. By the end in 2021 first-time buyers have fallen 26% from 32% from the year prior. This is the lowest it has been since the year 2008. With the way homes are being priced, it is hard for first time buyers to afford this market.
Information received from Anna Bahney. Article from CNN
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