My three big predictions for the real estate market this year.
Are you thinking about making a move this year? To help you form a solid plan and know what you can expect, here are my predictions for the 2022 market:
1. Mortgage rates will rise above 3.5%. Rates remain around 3% right now. However, with a strong employment market, inflation, and the uncertainty surrounding the pandemic, I expect rates to rise to 4% before the year’s end. For the average mortgage in the Madison area, that would add $117 to your monthly payment.
2. Price growth will come down. With increasing rates, the more expensive market will cause home buyers to delay their purchases. With that many people leaving the market, we expect home price growth to return to the single digits. This does not mean overall prices will drop, just the rate of year-over-year growth.
3. New listing inventory will hit a 10-year high. As the market continues to normalize, many homeowners will be encouraged to list their homes. As the year progresses, home sale contingencies may become more common, and homeowners will finally decide to cash out as price appreciation slows down.
It appears that we may be headed toward a more balanced market. However, that won’t happen overnight. If you have any questions on the local real estate market or just need some advice on how to move forward, give me a call or send me an email. I look forward to hearing from you.