2021 saw a steep increase in home prices caused by a combination of buyer demand and low interest rates, along with a decrease of market availability. But what does this say for continuing market trends and how will home buyers be impacted moving forward?
There are a few indications that new home availability will skyrocket, which is good news for young home buyers. And although 2021 saw a 20 percent increase in median home prices compared to 2020, the market remains competitive. Let’s take a look at the up-and-coming home market trends and how they will affect new home buyers this year.
Top trends to watch for
Competitive housing prices and mortgage rates are a must for new home buyers. Luckily, home trends indicate a rise in accessibility to the buyers market, despite home price increases. These prices aren’t set to skyrocket anytime soon and are projected to move at a slower pace going forward.
No matter if you’re a first time homebuyer or a seasoned real estate mogul, keep track of the following market trends for better home buying options this year.
The amount of homes that are on the market are expected to increase in 2022. This is happening for a few reasons.
First, the amount of time that people are owning homes is decreasing. Homeowner tenure figures have steadily declined since 2012, with a nearly 3 year decrease between 2012 and 2020. Labor shortages greatly impacted this number in 2021, as well.
Second, building supply shortages from previous years are projected to ease, causing even more market inventory to be available this year. Despite home prices, more homes on the market will give homebuyers even more choices and accessibility.
Home price appreciation
Trends indicate a record slowdown when it comes to appreciation of home value. In 2021, home appreciation prices equaled more than that of 2019 and 2020 combined. And although appreciation prices have risen over 100 percent since the Recession of the 2000’s, the increase will become steadier over time. 2021 saw an average increase of nearly 17 percent and 2022 is projected for increases of around 14 percent.
A big worry for many first time homebuyers is market competition fueled by buyer demand. This was especially prevalent during the home seller and buyer market of 2021. With the increase of work-from-home opportunities, many felt the need to expand to larger homes. Due to construction limitations, however, there seemed to be less homes available to potential buyers.
Luckily, buyer demand is projected to decline this year due to slower appreciation growth and less supply shortages. This will create a more balanced buyer’s market for those looking to own a home.
Getting ahead of the competition
Between buyer demand, market availability, and appreciation, homebuyers might have a tough time finding their dream home. Seeking out competitive mortgage loan rates with a Denver mortgage broker is one way to stay prepared during the home buying process.
Blue Arrow Lending can help you find the best options for your home buying needs. Whether you’re a first time homebuyer or looking to refinance, contact our team of professionals to discuss your options.