Should I Buy a House in This Market in 2022?

If you’re thinking, “Should I buy a house in 2022,” you’re probably wondering if you should buy now before prices go up even more or if the housing market is a giant bubble that’s about to burst. The truth is, if you knew the answer to that for sure, you could become filthy rich. If you’re trying to figure out if it’s better to ask a fortune teller, Ouija board, or Magic 8-Ball, we might be able to help. We can’t tell the future, but we can share some housing market predictions for 2022.

Mortgage Rates Will Probably Go Up

Mortgage rates going up seems like a pretty sure bet. Mortgage rates follow other interest rates, and interest rates follow inflation. If you’ve been in a grocery store lately, you probably know all about inflation.

Increased mortgage rates can mean good news or bad news depending on how you plan to buy your house. If you’re going to take on the biggest mortgage payment a bank will give you, higher interest rates mean more of your payment goes to interest and less goes to principal. That means the maximum price of a house you can afford will go down. On the other hand, rising mortgage rates usually decrease housing prices a little because many buyers do max out their mortgage payments. If you’re planning a cash offer or have a large down payment, rising rates could work out in your favor if you’re looking to buy a house.

Housing Prices Might Not Go Up As Much

There are good reasons to believe housing market predictions for 2022 that housing prices won’t go up by as much as they did in 2021, will stay flat, or will even go down a little. Part of that is interest rates. Another part of it is buyers either can’t afford to pay more or don’t think it’s worth it to pay more to buy a house. In some markets, computer models are even predicting that prices went up too much, and there might be price decreases in the areas that saw the biggest increases.

Rents Will Keep Going Up

The number of markets where it could be cheaper to rent than buy got a lot smaller last year. Economists are predicting that those rent increases are going to continue. That means your choices aren’t that great. On the one hand, you can rent and pay more than the cost of owning without building equity. On the other hand, you could be paying a sky-high price for a house while hoping the market doesn’t crash the day after you close. Since high rents push more people to buy if they can, that will also keep some upward pressure on housing prices.

If you still haven’t figured out how to tell the future, you’re going to have to go with your gut. If you’re going to move soon, buying a house is rarely a good option and even less so now. If you’re secure in your job and not planning on moving, you might want to buy so you can lock in the most amount you’ll ever pay for housing. Sure, prices might go down, but you won’t have to plan your life around the housing market anymore.

People Will Still Prefer the Suburbs Over Cities

Let’s face it, COVID-19 is far from over. Even though some people are moving back to big cities, there are still a lot of people who aren’t ready to go back or will never go back. If you’re in an area that’s been invaded by work-at-home people, they’re not going away any time soon. This means that there’s no reason for prices to fall in the suburbs and demand will stay up for some time. Welcome to the new normal.

Remote Work Will Stick Around

Almost half of workers are still working remotely at least part-time. 91 percent of those don’t want anything to change. When it’s that many workers, employers are going to have to listen. This is another sign that housing prices won’t drop significantly any time soon.

First, remote workers with big city salaries will still be competing for houses in the suburbs or lower cost of living cities. Second, people will want bigger houses to have a nice work area. Finally, a lot of those city workers are moving out of rental apartments, so they’re increasing demand without opening up the supply of houses for sale.

First-Time Home Buyers Will Have It Worst

When the housing market is tight, first-time home buyers are naturally going to have the hardest time. They’re often trying to put together the minimum down payment while trying to just barely qualify for a mortgage. Second-time buyers have an entire house they can use as a down payment or to make a cash offer. Then you have investors who are still buying up houses to take advantage of increased rents or who are betting on home prices continuing to rise. Sellers will almost always take the highest offer that doesn’t have many risks of falling through at the last minute.

Buyers Stuck on the Sidelines Will Jump In

Many buyers are sitting on the sidelines right now. Some couldn’t afford to buy last year but have been working on their finances or are ready to take advantage of the smallest dip in prices to be able to buy a house. Others are looking at the market and deciding that maybe now isn’t such a bad time to buy after all. This is yet another reason to expect prices to stay up for some time.

So Should You Buy a House in 2022?

When you start thinking about housing market predictions for 2022,  buying might seem like a little better of a choice than you might have thought it was to begin with. You’re still making a guess, but at least your guess is a little more educated.

One way you can reduce the guesswork, even more, is to find out how big of a mortgage a bank will approve you for and what your interest rate will be. That way, you’ll have some real numbers to compare against your current rent. LemonBrew makes it easy to qualify for a mortgage. Just go to LemonBrew Lending, enter your information, and get your answer.