Home prices have surged over the last year and a half, but as rates go up and more listings hit the market, that rise is expected to slow down over the course of the next year.
In September, home prices grew by a record 18% year-over-year, with the median price of an existing home shooting up nearly $40,000 in a year. It’s thanks to the low supply and high demand, especially in major cities where prices made their biggest leaps.
Looking ahead, real estate brokerage, Redfin, predicts a 12-month home price growth will be at 3% by the end of 2022. If that rate comes to fruition, it’d mark a 16.9 percentage point drop from the current level of price growth. It’d also mean the housing market would shift from a historic housing boom into a more normalized market where would-be buyers might actually have some time to think through their purchase.
Conditions created by the pandemic will have also cooled down: rates will likely be higher, and with much of the country back to work and daily routine, there may be fewer shoppers. Plus, a rush of listings is expected in the next few months to help ease inventory. This may make more room for different price points on the market, which is good news for buyers working with 3%, 5%, or 10% down payments.
For now, the supply gap isn’t even close to being filled, so competition is likely to stay intense. Being ready with your best offer is important, and getting pre-approved is your first step in getting there. It only takes minutes, contact us with any questions.