The housing market has been on a wild ride the past few years. Interest rates and inventory have been low creating a windfall for many sellers but headaches for buyers. Sellers have reaped the benefits through multiple offers with favorable terms including few to no contingencies. Buyers on the other hand have had to move fast, submit high offers and make concessions just to stay in the game. We are all wondering what will 2022 have in store for the housing market? While I can’t see the future, I can review what experts are predicting. 

Interest Rates

While we have enjoyed extremely low interest rates, that may change in 2022. Mortgage rates hit an all time low in 2021 and then saw a small uptick toward the end of the year. Mortgage rate experts are predicting slight increases for 2022 as well. Most agree that rates will increase to 3.6% up to possibly 4%. The Fed has a history of dealing with high inflation by raising interest rates which drives mortgage rates. While the increase is expected, mortgage rates are expected to remain quite reasonable. 


Inventory has been an issue for quite some time and that isn’t expected to change much in 2022. Even prior to Covid, home inventory was scarce. With supply chain issues and inflation, inventory will probably still be lower than what the market needs. 

Home Prices

Many people have pondered if the pandemic, inflation and rising interest rates would create a housing market crash in 2022. Experts are predicting that these factors will slow the increase in home prices. In other words, they believe home prices will continue to rise but at a much slower rate. In a market where there are still so many buyers competing for homes, it is hard to see prices dropping.


What does this mean for you?


Advice for Buyers

People often think when interest rates rise, buyers leave the market. In this case, interest rates and inflation have increased rent. At some point, renters begin to look at the benefit of home ownership. This means more buyers not less. With inventory low, 2022 will be another year of buyers competing for homes. With that in mind, here are some tips for home buyers in 2022.

Shop lenders and get pre-approved

Find a good interest rate and get pre-approved before you go looking. In a competitive market, you need to be able to move fast. If you have to go to a bank for financing before writing your offer you may lose out.

Find an experienced agent

Experienced agents in a good brokerage will have knowledge about homes coming to market. You can often get an early look at a home and put in an early offer. If you are searching online, those homes have probably already been shown and have pending offers. If you are worried about the cost of an agent, it is common for the home seller to pay the commission to the listing agent which is split with the buyer’s agent. Having a realtor shouldn’t cost you extra and will provide you the representation you need.

Give yourself time

Buying a home in this market requires time and patience. Set your expectations so that you aren’t disappointed when you don’t get an accepted offer right away. As in 2021, 2022 will be competitive and you need to keep perspective. Try to set up multiple showings and keep your mind open to homes that don’t check every box.

Don’t take shortcuts

Even though you should be vigilant and move fast, you also don’t want to take shortcuts. Buying a home is one of if not the biggest purchase of your life. If you cut corners to win in a bidding situation, you may end up paying the price later. One of the most disturbing trends is skipping the home inspection. This can be disastrous. There are ways to make your offer more appealing without skipping the home inspection.

Advice for Sellers

There is no doubt that 2021 was a great year to sell a home. 2022 is on track to be another great year. While home prices won’t rise at the same rate, experts are predicting they will still rise. The main issue for sellers is that selling your home often means buying a new home and dealing with all the competitive situations I’ve mentioned earlier. Here are a few tips to navigate the home selling process in 2022.

Strategically time Buying & Selling

You should get your home ready by doing some needed maintenance and a pre-listing inspection while searching for your new home. Have a realtor lined up and marketing in place so you can move fast once you have an accepted offer on your new home. The obvious issue is that sellers may not like a home sale contingency vs an offer without one. If you can show that you’ve done the work and your home is ready to list immediately, it will be less of an issue. If you do it in the opposite order, you may get stuck without a home. You can always counter offers with a suitable replacement clause. That means the buyers of your home agree to wait to close until you get an accepted offer and can close on your new home.

Find a qualified realtor

As stated above, you will want to have your home ready to sell when you get an accepted offer on your new home. A realtor can help you get a pre-listing inspection, determine what maintenance or upgrades will bring you the best offers and help prepare to market your home. I understand that sellers think that because it is so competitive they don’t need a realtor, but you may be leaving money on the table. Research shows that the experience and knowledge of a quality realtor will often cover their commission and give you a return on your investment.

Again, I can’t predict the future. I can only share what experts are saying.  If correct, price increases will ease, mortgage rates will rise but not by very much and there will still be a demand for more houses. 2022 is shaping up to be another strong year in real estate. If you are planning on buying or selling this year, be strategic and consult with an experienced realtor. 


Best Wishes for a Healthy & Successful 2022!