From limited inventory and rising prices to bidding wars and increasing home equity, there are many important real estate trends taking place right now. Let’s go over each in depth here. Your trusted real estate agent can also provide more insight into each trend so you can make better buying and selling decisions.
1. Shortage of Homes
Housing supplies across the country have plunged to their lowest level in history. According to Forbes, there were just 1.38 million homes on the market in June of 2021, down 23 percent annually. This trend continues into 2022, with buyers scooping up homes faster than they have ever done before. As a result, the average home stays on the market for a record-low 15 days.
At the same time, mortgage rates are holding steady, at under 3.5% for a 30-year, fixed-rate mortgage. While low, it’s still not as low as last year, when rates were in the 2s.
2. Bidding Wars
With such limited inventory, there is too much demand for the supply. This means too many buyers are clamoring over the same house resulting in fierce bidding wars that are having buyers waive things like home appraisals and inspections. With the U.S. facing a housing shortage on top of the pandemic, these factors have spurred sellers to hold off on putting their homes up for sale. This made the rate of bidding wars escalate much more quickly than anticipated. As a result, homes are going for tens of thousands of dollars over the asking price.
3. Rising Prices
Zillow forecasts that over the next 12 months, U.S. home prices will rise 11% overall. This is a lot lower than the nearly 20% percent we saw between September of 2020 and 2021, but this predicted price increase will continue to strongly favor sellers. This has put homeownership out of the reach of many would-be buyers. Home prices are simply not keeping up with median incomes.
In fact, median home prices rose 30% and incomes rose just 11% over the same time period, says CNBC.
4. Increasing Home Equity
More and more homeowners are tapping into their home equity. According to Bloomberg, homeowners took out $63 billion in equity from their properties as part of 1.1 million cash-out refinances in the second quarter of this year, which is the biggest quarterly volume we’ve seen since 2007. Put another way, about one in five American homeowners withdrew money out of their properties in 2021.
Of course, there are many more real estate trends happening now as we emerge into 2022, but these are the most common.
Contact Berkshire Hathaway Premier Properties
Need more insight into the real estate trends in your area and how those trends will dictate your home buying or selling experience? Our agents can help. Just contact Berkshire Hathaway Premier Properties today.