The pandemic brought tremendous shifts in the real estate market. We witnessed new opportunities, digital transformation, and arrival of climate conscious home buyers, high housing demand, labor and inventory shortages and high mortgage rates.
We are about to enter 2022, and it is expected that the construction business and this entire real estate market will further witness more shifts. The housing market will probably be bringing a whirlwind in the upcoming years.
Home sales probably get increased. We will likely witness an escalation in the mortgage rates. In addition, the demand for more and more homes will keep the entire real estate market competitive enough. Eventually, the house construction costs will go up further in 2022.
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The challenge of rising prices and rising rents
This market will likely to eye-witness affordability challenges. The rising prices, increased mortgage rates, escalated rents might project to increase. Besides, home shoppers are expected to widen their search to look for less pricey areas. The real estate offering the shopper a good and affordable value will attract massive number of audiences. Suburbs offering low prices might help the buyers face these challenges wisely.
The challenge of increased mortgage rates
Since this pandemic started, the housing market has faced unprecedented uncertainty in the last two years. The 30-year old fixed mortgage rate is likely to get augmented. Besides, the numbers have gone from 3% to 3.5%. It is expected that by the time of late fall, the high mortgage rates and high housing prices will probably slow down the growth of this industry. Sluggish growth will surely discourage new people from entering the market.
2022- The era of climate-conscious home shoppers
It is predicted that the next and even the rest of the years will spot the presence of climate-conscious home shoppers. Climate change has become an important factor to be kept in mind when making home-buying decisions because the surge in natural disasters and extreme weather events has been witnessed. Now, people prefer living in resilient homes that fully withstand the changing climatic conditions.
More and more new home construction projects likely to witness
In 2022, greater than before, new home construction projects will likely commence so that increased and continued demand can be tackled. Along with that, increasing interest rates might impact the housing market more than it ever did in the past. The rise in the interest rate will definitely leave a psychological impact on home shoppers and sellers.
Increased resale home transactions
The real estate market might see promising revolution in the next year, 2022. You will spot increased resale home transactions. The pandemic has brought many changes in our lifestyle and the way we work. Remote working style has opened up new avenues and dynamics. 2020 collected 5.5 million resale transactions.
In addition, the year 2021 gathered around 6 to 7 million resale home transactions. And numbers will obviously get high. It is all because of the remote as well as hybrid working decisions that the demand for home office space has been augmented. Such a dramatic shift will fuel the market promisingly.
The upcoming months of 2022 are likely to be more advantageous
Experts have predicted that the upcoming months will be more fruitful for the housing market. Home sellers will remain in the lucrative and strongest position. Buyers will see price stabilization, competitive interest rates. However, shortages in labor might remain a big hurdle and likely delay new construction projects.
It is advised by the experts that the housing market should move on a strong pace in the upcoming years because the demand will remain constantly high and the inventory shortages will remain be a big challenge.
Conclusion
Lastly, the home-buying experience will see the arrival of digital transformation. Yes, the real estate industry has embraced digital technology. They are making this intelligent move to meet the demands of Gen Z as well as Millennial home buyers.
Digital transformation will end up making strong customer connections, and the industry will probably be staying ahead. No doubt, the pre and post-pandemic fundaments did bring a drastic shift in this sector.
You can share your feedback on how you predict the future of the housing market for 2022. Let us know your forecast and enlighten your fellow readers. Stay connected over here.
