Housing was one of the strongest sectors of the economy for 2021, but rising interest rates and inflation are causing many to wonder if sales will continue as strong in 2022.
Lawrence Yun, chief economist for the National Association of REALTORS, believes housing sales volume will decline in 2022 but will still outpace pre-pandemic levels, based on continuing demand from homebuyers. Goldman Sachs economists predict that home prices will climb another 16%, reports Houwzer.com. Yet, Corelogic has lowered its forecast from 2.2% to 1.9%, according to Fortune.com.
Fannie Mae is predicting that mortgage rates will rise to an average of 3.4% next year, while the Mortgage Bankers Association believes rates will rise to 4%. If a buyer puts 20% down on a $500,000 home, they will have a monthly payment of $1,682 at 2.98%. At 4%, the monthly payment would be $1,910.
Fortune.com points out that the Federal Reserve predicted 1.8% inflation for 2021, but inflation reached 6.2% in October – the highest rate since 1990. So, should you buy a home or wait it out? Economists can’t agree on their outlooks, but housing is a terrific hedge against inflation. Ask yourself what you can afford and go from there.
Here are some articles that I hope will provide valuable information if you are considering buying a home in 2022:
What is Escrow? An Introduction for First Time Home Buyers
Private Mortgage Insurance 101: What You Need to Know First
5 Common Contingencies All Homebuyers Should Know
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