2021 in ReviewI believe we all can easily say that the economy for 2021 was absolutely crazy.Me being a Realtor, I am especially talking about the Real Estate market.Experienced or not, if you lived
What to expect with Mortgage Rates💰%
Dated: January 13 2022
2021 in Review
I believe we all can easily say that the economy for 2021 was absolutely crazy.
Me being a Realtor, I am especially talking about the Real Estate market.
Experienced or not, if you lived in the United States in 2021, you have definitely heard about the crazy Real Estate market we had.
From having crazy bidding wars due to an oversaturation of buyers to the price of Real Estate literally skyrocketing. Bullish is a term that best describes this market trend.
But the big question is, what caused it???
If you are familiar with the laws of supply and demand, you will understand that as demand rises and supply drops, then the value of that market will rise. That is what happened with our Real Estate market.
As a result of the pandemic causing the economy to slow down a bit, the Feds have used their power to drop interest rates making the price of pulling out a loan cheaper and easier for consumers to obtain.
In making mortgages easier to obtain for your everyday person, of course, you will see a surge in buyers as more people are now able to enter the market.
Now relating to the law of supply and demand, we had demand rise as a result of the increase of the interest rates reducing the supply of housing. And like we said previously when supply drops and demand rises, the market raises in value, in this instance that would be the Real Estate market.
What about 2022?
Now, the question we have to ask as we are entering into the year 2022. What will the market look like this year?
You may be asking this question in hopes of knowing if this is the year you should buy or sell your home.
Already starting off the year, we can see that the interest rates are on the rise according to Freddie Mac.
But what does this mean for the rest of the year?
Well, a major driving factor for the increase of these mortgage rates is inflation.
According to the National Association of Realtors, we can see that if inflation continues to be on the rise we can also see the mortgage rates continuing to grow.
NAR is expecting inflation to begin slowing down during the second half of 2022.
If we use the same logic as we did when the Real Estate market began to surge. Then we can assume that heading into 2022 we will not have the same year as we did in 2021.
We can expect rates to rise a bit more, along with the possibility of a decrease in buyers in the market.
Many experts are saying that we have nothing to fear in regards to the market crashing or housing values dropping. One thing we do have the potential to see though is a decrease in the rate of increase in housing prices.
Note: Not to say that housing prices will lower, but that the rate at which they increase will not be as fast as it was in 2021.
Nonetheless, the market will never be the same as it once was.
This pandemic has stirred up a lot of things, one of them being the Real Estate market. And as a result, we can expect to move forward in time expecting new and exciting things for every market, especially the Real Estate market.
I developed a passion for real estate from a young age. Around the age of 17 is when my interest began. After many podcasts, books, videos, and articles, I knew that this was for me. As soon as I p....