From Fees to Freedom: Richr’s Game-Changing Wealth Strategy in Real Estate, by Jason Rubin, and Glenn Orgin
Have you ever thought about why it costs 6% to…January 9, 2024
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Zillow predicts a 16.4 percent increase in property prices in the United States over the next year. While this would be a decrease from the 19.5 percent rise seen between September 2020 and September 2021, the forecasted price increase would still indicate a strong seller’s market. To put things in perspective, since 1980, the annual average pace of home price rise has been 4.6 percent.
Compared to its previous 2022 forecast, Zillow’s new prediction is a little more cautious. In November, Zillow predicted that home prices in the United States would rise by 13.6 percent in 2022. What was the reasoning behind the 2.6 percentage point reduction in the online real estate marketplace’s price growth forecast? A lot of it stems from mortgage rate uncertainty. Inflation is at its highest level in nearly four decades, which means the Federal Reserve will be more likely to hike interest rates next year. An unexpected spike in the 30-year fixed mortgage rate (now 3.1% on average) might drive away some buyers.
However, not everyone agrees with Zillow’s revised 2022 house price prediction. Zillow’s house price rise projection is the highest by several percentage points among the leading industry forecasts examined by Fortune. It’s followed by Fannie Mae (which expects a 7.9% increase), Freddie Mac (7%), Redfin (3%), and Realtor.com (2.9%). Meanwhile, according to the Mortgage Bankers Association’s prediction model, the median price of existing houses would fall by 2.5 percent by the end of 2022.
Of course, both buyers and sellers should take all of these predictions with a grain of salt. After all, none of these groups foresaw the unprecedented increase in housing prices we’ve witnessed in the last year.
Zillow home prices predictions and market projections showcased home prices soaring, but they will at least be more relaxed compared to the increase 2021 saw. Here are 4 of Zillow’s home price predictions and what you should prepare for in the rest of 2022.
According to Zillow, home prices are expected to rise by 16.4% in 2022. This is lower than the house prices USA 19.5 percent increase for 2021, but it is still one of the best years since Zillow began monitoring house values.
The average house in the United States was worth $316,368 on November 30, 2021. A rise of 16.4% would raise the price of a typical American home by $51,884. Existing-home sales are expected to hit 6.35 million in 2022, the highest level in 14 years. 6.12 million existing houses are expected to change hands in 2021.
The traditional seasonal trends for sales have been shattered in the last two years. There were signals that the housing market could be returning to its regular seasonal slowdown in the autumn. Data revealed that fewer properties were selling over list price, homes were beginning to stay on the market for a few days longer, and more sellers were lowering their prices if they were motivated to find a buyer.
However, by late December, things revved back up. Monthly price growth reduced, but only slightly. Inventory dropped, dropping below levels seen at the start of the pandemic. In 2022, the market is predicted to cool marginally, but not enough to turn it into a buyers’ market.
In 2021, home prices in several of the largest Sun Belt cities — those in the southernmost part of the United States — skyrocketed, including Florida. Buyer demand is likely to shift to smaller Sun Belt towns as larger cities like Austin and Phoenix become less cheap, boosting prices in those metros in 2022. The hottest real estate market is Tampa, where average house prices are expected to rise 24.6 percent by 2022.
According to Zillow analysts, fully remote employees will continue to seek out cheap areas with better lifestyle amenities, such as those in the Sun Belt and other atypical housing hotspots, where they have a better chance of becoming first-time homebuyers. Traditional retirement markets are also projected to witness increased demand as the population ages and seeks new living arrangements in a warmer climate with a slowed-down pace of life.
With millions of Americans working from home and other remote places, 2022 may see a new trend of younger purchasers purchasing a vacation or investment property before buying a primary residence to live in full-time. Those looking for a way to enter into the market and start building money are increasingly willing to invest in a part-time vacation home or an investment property to help them buy their dream home sooner.
Not everyone agrees with Zillow’s inflated predictions of the housing market across the US. Here are what some of the experts have to say about 2022.
NAR polled more than 20 economists and housing professionals to find out what they think will happen to house prices, new home sales, and existing home sales in 2022. This year, the organization predicts a 5.7 percent increase in median home prices. In 2022, new-home sales are predicted to increase to 920,000, up from over 800,000 last year. Existing-home sales are forecast to fall to 5.9 million units, down from roughly 6 million units sold in the previous year.
The analysts discovered ten “hidden gem” property markets in the United States. Knoxville, Tenn., Spartanburg, S.C., Fayetteville, Ark., Dallas-Fort Worth, Huntsville, Ala., Tucson, San Antonio, Daphne-Fairhope-Foley, Ala., Pensacola, Fla., and Palm Bay-Melbourne, Fla. are among the cities on the list.
The online real estate firm believes the housing market in 2022 will be no more predictable than it has been in the previous two years. Redfin stated the housing market would be more balanced in 2022. Expect greater options, less excitement, and slower price increase rather than a buyer’s market.
Redfin predicts that before mortgage rates rise, there will be a rush to buy homes at the start of the year. A much-needed rise in new buildings will improve sales modestly in the second part of the year. There will be 1% more sales in 2022 than in 2021, and home price rise will moderate to 3% by the end of the year.
According to Danielle Hale, chief economist at the real estate listings website, house buyers will have a greater chance of finding properties in 2022 but will encounter a tough seller’s market.
Affordability will become more difficult as loan rates and prices increase, but remote employment may widen search regions and enable younger buyers to locate their first houses sooner than they could otherwise. According to Hale, current property prices will rise by 2.9 percent.
Even as persistent supply-demand factors ensure prices continue to climb countrywide, affordability difficulties will limit costs from rising at the same rate we witnessed in 2021. According to Hale, existing house sales are expected to increase by 6.6 percent. She predicts that sales in 2022 will be the second greatest in the last 15 years, after only 2021.
According to her, the number of homes on the market will increase by 0.3 percent, while single-family housing starts will increase by 5%, and the 30-year fixed mortgage rate will average 3.3 percent for the majority of the year before rising to 3.6 percent by the end of the year.
Despite rising house prices to be expected through 2022, it’s still a wise investment to get into purchase sooner rather than later. Home prices will continue to increase, and with interest rates on the rise, it’s better to get locked in at a great rate while you can. You can offset the closing costs with Richr’s 2% cashback on your purchase price when you submit your offer through their contactless system.
Buy your home and get up to 1% cashback.Book a Call
According to the Washington Post, the following real estate experts weigh in that home prices are on the rise, and we’ll see yet another year of a competitive sellers’ market from their real estate predictions. Despite housing prices rising, the 2022 real estate market should be less hectic than what we saw in the height of 2021.
Home price predictions have a promising house price increase rather than a hopeful decline for many buyers. Some areas will see higher spikes in the rising home prices than others, such as Miami, Tampa, and Jacksonville, Florida. With an overspill of homebuyers that struggled to get into the housing market rising in 2021, we’re likely to see another year of high competition.
Rising interest rates are starting to shift the Zillow housing market forecast, but we’re still predicting a typical home price increase in most residential areas. However, due to the interest rate Zillow predicted with their increase, the real estate prediction 2022 calls for less competition than we saw in the Zillow housing market 2021.
Since we don’t have a crystal ball or access to the famed time machine from Get Back to the Future, we must rely on industry experts’ home value projections and market trends. Right now, leaders like Fannie Mae expect 2023 to be slower than average, and the house prices increase could be a moderate 2.9%. However, 2023 is set to have the highest median price of a home by the end of the year, according to their soaring predictor of it surpassing $460,000.
Even with a house price increase in the Zillow home value forecast, 2022 is an excellent time to buy a house. Historically, we see house prices USA increase year over year, so the sooner you’re able to secure a home in the rising real estate market, the better.
Home prices tend to rise over time because of so many contributing elements. Still, there is no specific percentage increase over a 10-year period, even with a Zillow home price estimate.
The average annual house appreciation is determined by local housing market trends as well as the economy, resulting in a considerable deal of volatility. The fundamental economics of supply vs. demand states that when the supply of available properties for sale exceeds the number of purchasers, prices will fall (and vice versa). If there is a lot of unemployment and individuals can’t afford to buy houses due to estimated housing prices interest rate hikes, supply might exceed demand, leading prices to fall.
Neighborhoods can also change, and these changes directly influence housing values. If crime rates rise and schools fall short of expectations, “for sale” signs may emerge in front of residences. A lack of neighborhood amenities, a considerable number of commercial buildings adjacent to homeowners, and a large number of homes in serious disrepair are all factors that might lower property value despite home prices rising across the nation.
We hope to see more good changes in 2022. With ongoing economic growth and the relaxation of supply chain halts, building costs are expected to drop and stabilize. We expect a surge in new house construction as building supplies become more readily available.
Many house buyers who missed the real estate tidal wave of 2021 are likely to enter the “tamer” market of 2022. This implies that, while building costs may be lower, you may have to wait longer to live in the home of your dreams due to a limited supply of available lots.
Buyers can relieve the financial burden of homeownership when they submit their offer through a contactless system like Richr. Earn 2% cashback on your purchase price. That’s $8,000 in your pocket based on a $400,000 home!
If you’re looking to buy or sell a house and would like to discuss your option, Richr can help you!
Our fully licensed Concierge Team is here to answer questions and provide free, objective advice on how to get the best outcome with your sale or purchase.