After more than two years, it is clear who survived the pandemic unscathed. We are all aware how many parts of society collapsed entirely. Despite this, the real estate remained stable. And in the coming years, we can expect to see the housing market continue to flourish.
What Keeps Real Estate Strong?
Looking at the numbers today, the solid state of the housing market is the one thing that stands out. For instance, more than 80% of current mortgages have interest rates under 5%. That matters a lot. And to go even further, more than 50% of mortgages have interest rates below 4%. These are the current rates on existing mortgages. This is the reason the housing market has such a strong foundation today. We are able to avoid a crisis with a flood of foreclosed properties coming to market, as there was back in 2008. Thanks to the abundance of homeowners and the historically low mortgage rates.
Second, people currently hold a lot of equity. Approximately two-thirds (roughly 68%) of homeowners. According to the Census and ATTOM, homeowners have either paid off their mortgage or have at least 50% equity.
What to Expect?
According to the majority of experts, the first few months of the upcoming year will see extremely rapid price increases. However, this will soon start to taper off and maintain their normal level. The housing market may be in for a whirlwind, says chief economist Danielle Hale. Yet, on top of the increase that occurred in 2021 it is anticipated that sales and prices will rise.
Based on studies by experts in Median US Home List Prices conducted by Altos Research, there is a high level of demand. This keeps prices high, and as a result, the real estate market will continue to be robust in 2022. People are now interested in owning condos as well as houses and lots for sale. The reason is, they were able to save more money by staying in their luxurious homes. The good news is that this increase won’t affect people who already own luxury homes. They can now fully enjoy their opulent homes. But prospective buyers must carefully inspect each listing to enjoy their investment and reap the benefits of their efforts.
“Home prices are high, mortgage rates are high, and inventory is still quite low. If the economy and the job market hang in there, we’ll see some pickup in housing activity. But there are no material changes to the price, rate, and supply fundamentals.” – Greg McBride, Bankrate Chief Financial Analyst
The Demand for Housing will Increase
The rise of real estate will be determined by consumers. Additionally, it’s crucial to keep in mind that real estate is local and goes beyond trends. The housing market faced numerous difficulties, but it managed to hold its own. Real estate will continue to be successful, particularly as demand grows.
The Bottom Line
In a nutshell, homeowners will fight to keep their current mortgage rate. And since they have a lot of equity, we are in one of the most structurally sound housing markets of our lifetime. This is yet another example of how things are different from 2008. Truly, the housing market is stronger than what it seems.
What To Do:
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