Investing can be a tricky business at times. That’s why it is important to keep up to date with the real estate housing market trends throughout the year.

Table of Contents

  1. Experts’ Predictions for the US Real Estate Housing Market
  2. Experts’ Predictions for Buyers in the US Housing Market
  3. Experts’ Predictions for Investors in the US Housing Market
  4. Real Estate Housing Market Trends We’ve Seen So Far
  5. Experts’ Predictions for the Rest of the Year
  6. What Investors Should Expect for the Rest of the Year
  7. Do Real Estate Agents Control the Housing Market?
  8. When Will the Housing Market Crash?
  9. Recap

In this article, we will explore the predictions of the housing market this year and how accurate they have been. Then, we will look into the real estate housing market news so far this 2022. Lastly, we will see what experts are saying about the trends for the real estate market for the rest of the year.

Experts’ Predictions for the US Real Estate Housing Market

Since the pandemic hit the US in 2020, predicting trends in the housing real estate market has been quite tricky. No one expected the boom that occurred in the real estate market during the pandemic. Since then, people are not sure where the market is headed today. Let’s look at some of the predictions experts had for the real estate housing market 2022.

1. Buyers Re-Entering the Market

As we saw in 2021, home buyers shied away from the real estate housing market. It is because property prices were high, and bidding wars frequently occurred on the available listings.

Though the prices in the housing market are expected to continue to be high in 2022, experts say bidding wars may not happen as often. It is predicted buyers looking to acquire a property in 2021 will re-emerge to purchase listings this year.

2. Economic Growth

As we saw substantial improvements in 2020, experts predict that the economic growth will continue in 2022. More specifically, the Federal Reserve expects the growth to be about 3.3%.

3. Construction Costs

Experts are predicting that the construction costs of properties will lower a bit in the 2022 real estate housing market. The reason the costs were so high in previous years was that construction materials were getting harder to come by. Whether it was an inflation problem or manufacturing issues, the prices continue to increase overall.

With the predicted economic growth that is expected to occur, construction and manufacturing companies should be able to keep supplies in stock. It would help bring down construction costs, and prices overall in the real estate housing market would decline as well.

Experts’ Predictions for Buyers in the US Housing Market

As we looked at some of the more general predictions for the real estate housing market above, now we will focus on what experts had to say about the market for the buyer’s market in 2022.

1. High Property Values

Predictions say that the value of properties will continue to increase in the first half of 2022. Basically, such a rise in prices is due to inflation. In 2021, we saw an increase of 10.5% in property value prices. It is predicted that the rise will reach 11.8% in the first half of 2022.

Though the housing market prices are expected to jump at the beginning of the year, experts predict that towards the second half of the year, prices are to stabilize. It is due to more inventory being available and, therefore, more choices for buyers. Property values are expected to remain more consistent.

Related: How Is Inflation Affecting the US Real Estate Market? 

2. Higher Mortgage Rates

As seen in 2021, there was an increase in mortgage rates. Experts expect the rise in mortgage rates to continue rising during 2022. It can affect home buyers looking to buy homes with a lower mortgage rate.

Specifically, experts predicted that the 30-year mortgage rate was likely to increase by 3.8% at the beginning of 2022. Despite the expected rise, if property values stabilize in the real estate housing market, it may also help stabilize mortgage rates.

3. More Homes Being Built

Due to the demand for traditional homes, it is said that there will be an increase in the number of homes built in 2022. As construction prices are predicted to fall due to manufacturing companies keeping up with demand, it would help builders stick to their demand of building more houses.

As mentioned above, property prices might stabilize during the second half of 2022. It is expected to also help construction workers with building homes. People will be more inclined to purchase homes with significantly high prices, which will boost the demand for homes needed.

Experts’ Predictions for Investors in the US Housing Market

Above, we discussed what buyers can expect from expert predictions of the housing supply and the real estate market. Now, we will look at what investors should expect.

1. Possible Rent Control

Investors should be aware that some cities may develop regulations on rent control in 2022. Basically, rent control refers to laws limiting the amount of money renters are allowed to pay on their property. It means landlords or property managers must only ask for the prices allowed in the rent control.

It can affect investors as they may want to reconsider the city of their income property. The return on investment may not be worth it in cities with rent control policies.

2. Rent Growth

On the contrary, rent prices and the need for rental properties are said to go up in 2022. They can be a welcome development for investors. Due to the high property prices, people are unable to afford a mortgage and purchase a house. Therefore, the need for properties for rent is said to increase.

Additionally, the price to rent ratio is also said to rise. It is due to property value prices growing in 2022. Investors should always research the rental laws in the cities they are looking to invest in to make sure that city has no laws on rent control.

Real Estate Housing Market Trends We’ve Seen So Far

Now that we’ve reviewed all of the predictions for the 2022 real estate housing market, we discuss what has actually happened so far.

1. Rising in Listed Homes

So far this year, we’ve seen a rise in the homes being listed on the real estate market. Though it may seem good as there was a great demand, we’ve also seen fewer people looking to purchase homes. As a result, asking prices on listings are down almost 10%.

2. Increasing Mortgage Rates

One of the predictions experts expected was higher mortgage rates in 2022. It’s definitely been accurate, with mortgage rates up 5.27% so far this year. It is an attempt by the Federal Reserve to spark a decrease in the housing market.

Though the mortgage increase’s definitely helped to decrease the housing market, it is impacting homebuyers. There are more houses on the market. However, with mortgage rates so high, people do not want to purchase homes.

Related: Mortgage Rates: The Real Estate Investor’s Complete Guide 

Experts’ Predictions for the Rest of the Year

Now that we’ve reviewed predictions and current trends of the 2022 real estate housing market, we can look at what experts expect to happen the rest of the year.

1. Less Competition for Homes

As mortgage rates continue to rise, more and more people are unable to afford higher-priced homes. If the rates continue to go up, experts predict that higher-priced homes will face much less competition for purchasing. Homebuyers will either wait to purchase homes or compete to buy lower-priced homes.

2. Home Prices Would Somewhat Stabilize

Experts predict that the prices of homes will continue to increase until the end of the year but then stabilize a bit or even decrease into 2023. The decline will be caused by potential homebuyers being unable to afford the prices of homes and mortgages. Once the decrease starts to happen, it is expected more buyers will come back to the market to purchase homes.

3. Remote Work Could Impact Housing Choice

After the pandemic hit the US in 2020, many people’s work careers look a little different. Many businesses are now allowing their employees to work from home. It could impact the real estate housing market in a few ways.

First, people working remotely might not need to be near their place of employment anymore. It would allow people to work from any location. It might cause people to move back to more rural locations, away from their place of employment.

Additionally, people working remotely may want different types of housing than they would get working in person. When someone is working in an office, they don’t need as much space in their home as they won’t be home as often. If employees are working remotely, they might need more space, such as additional rooms for offices and more resources to help with their work.

4. High Mortgage Prices Would Drive Away Buyers

With mortgage prices suggested to continue to increase, potential home buyers may not be able to purchase houses they once could buy. It impacts the housing market, as fewer people will be looking to buy homes until mortgages become more affordable. It mainly affects first-time home buyers like millennials and the housing market.

What Investors Should Expect for the Rest of the Year

The first thing investors should expect for the rest of the year is that mortgage prices will continue to go up. It means more people will likely be looking to rent properties long-term rather than purchase a home themselves. Though rising mortgage prices are unfortunate for home buyers, they could provide an excellent opportunity for investors.

Additionally, investors should be aware that the home prices may stabilize. It would make purchasing an investment property more affordable. As mortgage prices are not expected to change, purchasing a traditional rental for a good price could increase your profits.

Do Real Estate Agents Control the Housing Market?

Though some may think real estate agents exercise control over the housing market, they really do not. Agents only make money from commissions. It means they need people looking to both buy and sell properties during all times of the year. If there are no buyers looking for houses, then there is no way for agents to make money.

As agents work for a commission, it would be reasonable to say they would like to control the housing market if they could. Unfortunately, they cannot. Real estate agents do not cause high property values and mortgage rates.

When Will the Housing Market Crash?

With property prices continuing to increase, people are wondering if it is a sign that the US is entering a housing bubble. Experts expect no housing market crash, though. Instead, they think prices will continue to increase or stabilize at a higher level due to demand. Below are some reasons why the demand for properties is so high:

  • Gen Z and millennials are looking to purchase properties
  • Supply cannot keep up with the demand for houses
  • Borrowers are less likely to default mortgages than in years past

Related: 20 Most Popular Cities for Gen Z Renters

Recap

The real estate housing market in 2022 can be a long journey for home buyers and investors. Experts’ predictions have so far been fairly accurate. Mortgage rates are high and are continuing to increase as the year goes on. Additionally, property value prices are rising. Both factors impact people looking to either purchase or sell homes.

If you are an investor worried about determining the value of investing in properties or certain locations, we recommend using Mashvisor’s tools. We offer tools such as our Investment Property Calculator and our Property Finder tool that helps make calculating a property’s profitability easy. We also only use data from reliable sources, such as the MLS, in our tools to ensure accurate information.

Real Estate Housing Market - Mashvisor's Property Finder

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The real estate housing market can be an unpredictable place. In this article, we looked into the current market trends, as well as future expectations. It should be noted that anything can happen in the real estate housing market.

Mashvisor understands how confusing it can be to navigate the US real estate market, so we recommend visiting our site to look through our deal analyzer resources to help with all things real estate.

To access our real estate investment tools, click here to sign up for a 7-day free trial of Mashvisor today, followed by 15% off for life.




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