Our REALTORS® have been getting many questions about what to expect from the housing market in the coming year. No matter whether you're interested in Mansfield or Ashland homes for sale, there are plenty of opportunities.
The big question on everyone's mind is how financing will change in 2022.
Over the last year, many places in the country have seen home prices skyrocket. Homeowners have had the chance to attract abundant attention, with many homes receiving competitive bids from multiple buyers at once. As a result, quite a few homes have sold for well over asking price.
The key to all this is the large number of buyers. Last year was unique because low interest rates prompted many buyers to jump into the market when they might otherwise wait instead. Combined with investor and "flipper" activity, buyers far exceed the available housing stock in many areas.
These conditions have actually lasted far longer than many experts predicted. However, it's a sure thing that they won't go on forever. In 2022, we can expect some changes in how financing a home will work. This will have the biggest impact on first-time homebuyers and those with less income.
No one can possibly foresee the future. However, several key trends are pointing in some specific directions. The more you know about the housing market going in, the easier it will be to realize your plans to buy without going over your budget.
Let's take a closer look at how financing a home will evolve in 2022:
- Interest Rates Are Expected to Go Up ... Eventually
For a homebuyer, interest rate is the amount of your mortgage principal that gets applied to your loan every year as interest. The lower, the better! The Federal Reserve is the central bank in the U.S. and sets interest rates that affect all lenders. When those rates go up, lenders will tighten eligibility restrictions. Buyers with lower incomes will need to prepare more carefully to remain in the market.
- First-Time Homebuyer Programs Are Looking to the Future
Lots of special programs are available just for first-time homebuyers. These are attractive due to low interest rates, low down payments, and the availability of down payment assistance or other aid. Such programs are usually sponsored by federal agencies but executed by lenders. In recent months, many have considered raising the amount borrowers can qualify for in response to higher home prices.
- More Sellers Will Enter the Market to Avoid Missing their Chance
Sellers have been in a conundrum over the last several months because, although they may fetch a great price for their home, it means they will be entering the market at the same time. Many more sellers are expected to make peace with this and plan to rent temporarily to make the most of the "seller's market" before conditions change. That may mean more housing stock, which would slow price growth.
- Buyers Will Need Trustworthy REALTORS® More than Ever
At a time like this, it's imperative that no one enter the market without being fully prepared. Sellers and buyers alike need expert help. But this is especially important for buyers because there are so many ways they could find their plans delayed, derailed, or costing more than they expected. Your REALTOR® is a guide who'll help you reach the safe harbor of your new home on your timeline and budget.
Contact us today to get started or find out more about your Ohio real estate opportunities.