We’re in the middle of the housing market frenzy, but how long will it last? Home prices rose 18.8% in 2021, according to the S&P CoreLogic Case-Shiller US National Home Price Index, the biggest increase in 34 years of data and substantially ahead of 2020’s 10.4% gain.
The year is still going strong, but simple supply and demand tells us the housing market will eventually cool down. Some economists point to the housing boom continuing at least through the new season we’ve just entered, while others are scaling back their predictions for the remainder of 2022. Due to soaring home prices, rising interest rates and low inventory, it’s likely going to remain an extreme sellers’ market through the spring.
In the face of continued strong demand, home prices were pushed even higher. Interest rates are also moving higher due to the war in Ukraine, rising oil prices, and inflation. However, rising mortgage rates should start to alleviate some of the demand. The combination of buyer pushback of sky-high home prices and mortgage rates will help to rein in the home buying market in the coming months.
If you are in the market for a new home, it’s important to be pre-approved before you begin your home search. First Centennial Mortgage can help you review your financing options. Contact us to learn more about how you can begin your journey to homeownership.