What Does The Second Half Of 2022 Hold For The Real Estate Market?
Today we’re talking about the direction of the housing market and how it may impact your decision to buy or sell this year. Any time you make a big decision you’re at an exciting decision point. And with any big decision, one important thing you should consider is timing. Buying or selling a home is no different. So, what does the rest of the year hold for the housing market? Here’s what experts have to say.
First, the number of homes for sale is likely to grow. There are some early signs that housing inventory is starting to grow and experts say that should continue in the months ahead. Here in the Daytona Beach area, we’re already seeing an increase in homes on the market. Back in March of this year, we had fewer than 700 homes listed for sale in the Daytona Beach MLS. Today, we have over 1000. Inventory is still lower than pre-pandemic norms of about 2000 homes but we’re definitely starting to see more homes on the market.
So what does more inventory mean for you? As a buyer, it means you’ll have more options, and we can all agree that’s welcome news. But remember, the housing supply is still low, so you’ll still want to act fast and put your best offer upfront. As a seller, more inventory means your house may soon face more competition as other sellers begin listing their homes. The good news is, that you’re likely also buying your next home, so you’ll benefit from having more options to choose from, which should make that move-up process easier.
Experts also agree that mortgage rates will continue to be driven up by inflation, although the rate of increase should be more moderate. So if you’re a buyer, you should work with both a real estate agent and a lender to learn how rising mortgage rates impact your purchasing power. It may make sense to buy now before costs rise even higher. If you’re a seller, rising mortgage rates are motivating some homeowners to move sooner rather than later, oftentimes because you’ll be purchasing a home too and want to lock in your rates before they climb even higher.
And like interest rates, home prices are projected to continue to climb. Even though inventory is expected to start increasing, there are still fewer homes for sale than there are buyers in the market, so that’s what will keep homes appreciating for the foreseeable future. That said, experts agree that the pace of that appreciation will moderate, but home prices aren’t expected to fall.
As a buyer, continued home price appreciation means it’ll cost you more to buy the longer you wait. But it also gives you peace of mind that, once you do buy a home, it will likely grow in value. That makes it historically a good investment and a strong hedge against inflation. As a seller, price appreciation is great news for the value of your home. Again, lean on a professional to strike the right balance of the best conditions possible for both selling your house and buying your next one.
One thing is for certain about rising home values and interest rates: it gets people off the fence. People either decide, “let’s go ahead and move now” or they decide, “you know what, we don’t have to move right now. Let’s hold off.” Regardless, of whether you’re a homebuyer or seller, you need to know what’s happening in the housing market, so you can make the most informed decision possible. We’re always available to connect to discuss your goals and what lies ahead, so you can pick your best time to make a move.