December Update: What to Expect From Metro Detroit Real Estate in 2022
Can you believe we are a few days away from 2022!? The holiday season is coming to a close and this time of year is always a good indicator of the health of the economic market. In 2021, spending is up across the board, with Black Friday sales, in particular, seeing a significant increase. This indicates that Michiganders have money to spend, but inflation rates are higher creating shortages in certain sectors.
If you’re thinking about buying or selling in the new year, see below for a real estate update US News helped me put together.
Market trends we’re seeing for 2022:
The inventory of available homes will remain tight, and rising prices will put pressure on affordability.
Interest rates will rise, but wage growth may help to provide a balance for buyers.
The rental market will see continued growth, but likely stabilize somewhat compared to the last two years.
There’s a lot of anticipation for new home construction, but when labor and supply issues ease enough for homes to be completed is unclear.
Buying:
In 2022, expect interest rates to rise somewhat – but that doesn’t mean they’ll skyrocket. The Federal Reserve has signaled intent to raise interest rates during the year to combat inflation.
While an increase in mortgage interest rates could squeeze out the homebuyers who are on the cusp of being able to afford a home purchase, interest rates will likely remain low compared to historic mortgage interest rates, like the 18.63% average in October 1981.
Contact me whether you’re looking for a great deal, new construction, or fixer upper! I have a network of leads ready to go for every type of buyer.
Selling:
One reason why a lot of sellers haven’t jumped at the opportunity to sell their homes – and why it’s not likely in 2022, either – has to do with the low interest rates that made refinancing a smart move within the last two years.
A lack of inventory is a bonus for many homeowners who do choose to sell their homes, as they benefit from eager buyers and rising prices. Though, it’s not a time to get greedy! Appropriate pricing and reasonable expectations are needed, especially as seasonality returns to the housing market.
Home sellers should also have a plan before placing their home on the market. By selling your current home, you’re likely looking to purchase another, which puts you among the competitive buyer atmosphere. It’s absolutely necessary to have a realtor you trust who can act fast — contact me if you need help!