Here’s what you can expect to see in our real estate market this year.
A lot of people have been asking me about what’s in store for the real estate market throughout 2022. We’re studying the market, and today we want to offer some predictions for the rest of the year.
In 2020, new homebuyers made up about 30% of our purchasers. We saw that drop to 25% in 2021, and that makes our market a little different. When we see a drastic drop like that, it tells us something is happening.
What was happening? Inflation and property values both went up significantly. We saw homes increase by 10% to 12% in value just last year alone. That’s a great thing for homeowners, but it’s making the market tougher for first-time buyers.
"We may see rates approach 4% by the end of the year."
We had a lot of big-name investors purchasing properties in 2021. They worked with cash buyers and other corporations to buy up properties. What ended up happening is that they paid a little too much for these homes. Then ended up taking a massive loss and stepped back from buying houses for now. That should open the door slightly for first-time buyers in 2022.
Next, let’s look at mortgage rates. They're likely to rise each quarter this year. We may approach 4% rates by the end of the year. That is not a high average by any means, but it is going to make homes more expensive than they are right now.
What are the top economists saying about home appreciation in 2022? They’re predicting much more modest price jumps than we’ve seen over the last few years. Most are predicting that homes will appreciate by about 3% this year. That’s a healthy number and a good sign for the future of our market. Here in the Kansas City Metro, I would be prepared for about a 6% increase in home values this year.
If you have any questions about buying a home, selling a home, or real estate in general, don't hesitate to reach out via phone or email. We look forward to hearing from you soon.
