Home Price Values
On a National Scale the real estate market blew expert’s forecasts for home price appreciation out of the park. According to National Association of Realtors Chief Economist, Lawrence Yun, homes were forecasted to increase 8.0% in value in 2021. The actual national average home price increased 18.1% by November 2021 and to 20% by end of year.
Experts predict an increase of 5.1% (average of all expert forecasts) in median home prices in 2022. To give a little perspective to these percentages. There was a study done by the National Association of Realtors in February 2020 for Single-Family Home Price Gains by Years of Tenure. The study showed a 28.8% increase in home value in a 7-year tenure. This is an average of 4.1% home price appreciation each year. In 2021 alone, the U.S. had an average increase of 20%!
Mortgage Rates are still in the low 3s, with the average national mortgage rate on a 30 year fixed mortgage is 3.642% as of Jan 19, 2022.
According to National Association of Realtors Chief Economist, Lawrence Yun and the Mortgage Bankers Association chief economist, Michael Fratantoni, It is projected that rates with be closer to 3.7% to 4% be end of year.
I know many buyers are “waiting out the market” hoping to see a crash. I wouldn’t hold your breath. This isn’t a replica of 2008. There isn’t a bubble. It is simply high buyer demand and low inventory. Rates are still low, however experts are showing a steady tick up. If you wait, you could end up paying more than if you buy now.
“It is estimated that more than 35% of renters can currently afford to buy the typical home. This translates to nearly 15.1 million renter households. These renters are typically 40 years old, 42% of them are married, and most of them have a bachelor’s degree or higher. Looking at their expenses, these renters spend $1,450 on average for rent. Thus, as it makes more sense for them to own than rent a home, expect homebuying activity to remain strong this year.”Nadia Evangelou
Senior Economist and Director of Forecasting
Other questions, comments, or concerns? Send me a DM, text, or call. I’m happy to talk it over. I can also send you article sources for above information.