Real estate developments in 2022 

Social distancing protocols and digitalization are expected to continue redefining real estate trends in 2022.

As demand for affordable housing reaches an all-time high, low mortgage rates and increasing demand are fueling more homeowners to sell. Meanwhile, homebuyers seek a new home away from major cities with loans at a great rate.

Home sales remain strong

Despite the impact of the pandemic, data show that home sales in 2020 still exceeded the number of homes sold in 2007. This is because the pandemic has encouraged more buyers to have a home of their own where they can protect their families.

Global demand for housing remains strong, and realtors see sales and profits rising as well in 2021. Some analysts, however, expect the growth momentum to slow down.  Data show that pending home sales were down 2.3 percent as of September of 2021, indicating that there will be a downturn in sales for the coming year.

Is market crash possible?

While mortgate rates remain low, the odds are likely that they’ll increase in the coming months or year ahead. The U.S. housing market tends to stay in line with the rest of the economy. As new home prices soar, many buyers are simply priced out of the market, particularly during periods of inflation.

Sellers are then expected to lower their asking prices, and banks will likely begin to raise mortgage interest rates slowly. It might not result in a total crash, but these two factors may help to slow things down significantly over the coming year.

Data show that one in every three home buyers relocated in the first three months of 2021 amid the pandemic. As new information and understanding about the virus develop along with effective vaccines, some buyers will probably either remain in place or eventually move for different reasons.

The slowdown in urgency to relocate is likely to impact various aspects regarding real estate, including prices, rates, and general demand.

Real estate listing site Zillow’s predicts that in 2022 prices (home values) will actually rise. In fact, they believe that home values will increase rather significantly, coming in at 13.6% higher overall between October 2021 and October 2022.

What the Future Holds

Based on these trends, it’s likely that the real estate market will continue to see a rise in home values but a potentially lower level of demand.

Higher inflation rates, a tough job market, and overall uncertainty can make it difficult for many buyers to commit.

An increase in the price of building materials and a lack of skilled workers has decreased the volume of new construction. On the other hand, the number of millennials looking to purchase a home is growing, so there’s still a possibility that the 2022 market will remain strong.