What You Need to Know About Taking Out a Home Loan in 2022
The real estate market has shifted tremendously since the start of the coronavirus pandemic. As we approach the two-year mark since COVID-19 reached the U.S., the market continues to adjust to the changing economic environment, rising inflation and fluctuating demand. If you’re looking to take out a home loan this year, it’s important to know about the current market trends and what to expect in the coming months.
Keep in mind that SCU Credit Union is with you every step of the way until you find that perfect home and for all the years you enjoy it. And if you're interested in learning more about buying and owning a home, MGIC offers a free homebuyer ReadyNest Education Course.
- Supply and demand. 2021 was the year of frenzied bidding wars, as the supply of homes on the market fell well below the heightened demand. Despite these conditions, home sales were up 44% in 2021 as compared to 2020, according to Realtor.com. Looking forward, experts expect the demand to remain high in 2022, but the supply of available homes is anticipated to inch closer to the demand as more new-construction homes hit the market.
- Home prices. In 2021, the average price of homes rose an average of 14.75%. According to the National Association of Realtors, home prices are expected to increase in 2022, but at a far more modest rate of 2.8%.
- Mortgage rates. Mortgage rates remained at historic lows in 2021, with the average 30-year fixed-rate hovering around 3% by the end of the year. Economists expect mortgage rates to increase in 2022, but to continue to remain relatively low, as compared to previous years.
Tips for Buying a House in 2022
If you plan on buying a house in 2022, here’s how to make the most out of your search:
- Get pre-approved. It’s always a good idea to get preapproved for a mortgage before you start your search. A preapproval gives you a leg up on bidding wars, shows potential sellers that you’re serious about buying and helps you keep your search within parameters you can afford. One option is a Smart Start Pre-Approval from SCU Credit Union!
- Use a local real estate agent. In a tight housing market, it’s important to use an agent who knows the area well and can give you a realistic picture of what you can expect to pay for the home you want.
- Prioritize carefully. Every homebuyer has a wish list of features they’d love to have in their new home and neighborhood. But, when supply is limited, absolute must-haves need to be chosen carefully. Narrow your list as much as possible before beginning your search, as it will help you to avoid disappointment later.
Keep these tips and considerations in mind as you begin your quest for the perfect new home. A little “pre-home” work can help make a big difference in the enjoyment of your home and your overall financial health for years to come!
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