There is no doubt that COVID-19 has affected our lifestyles and economy. Even the housing market was affected temporarily.
According to a survey, 2022 made some remarkable housing deals, along with emerging new trends of condos, luxury coops to townhouses.
Do you know the overall contribution of the housing market to GDP (gross domestic product) averages between 15 -18%, which is huge?
Are you planning to buy a new house? Then, we have good news to share with you that it is probably the best time to invest in the real estate business. In this article, we’ll focus on the striding purchase season that indicates the housing market is all set to make profits and will continue to rise in 2023.
Explore to find out what home buyers can expect from NY’s real estate market in 2022. Also, check the expert’s predictions for the housing market from 2023 to 2026!
Higher Number of Purchase Applications
There was an abrupt increase in house applications as compared to last year. As per the internet sources, the purchase applications were 9% higher than they were a year ago and will continue to do so in the upcoming year. Noticing the higher consumer demand, the federal reserves made many changes that helped lower the mortgage rates and stimulated the buyer’s interest
According to Freddie Mac, the mortgage rates at present are historically low!
Another factor i.e. encouraging people to purchase a home is the fact that they want to move into bigger houses following the social distancing protocols. COVID-19 has changed people’s mindsets to improve their standard of living and adopt healthy habits. Bigger houses are airy and more hygienic than crowded ones. Plus, people can enjoy their personal space.
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Prices of Existing Homes are Rising
When the pandemic hit the world, it made a bad impact on the real estate market. A dynamic fall of 17.8% in sales and about 1.3% less inventory was recorded in the housing market.
Fortunately, this downturn turned out to be temporary. As many home sellers denied selling their homes and waited until the economy stabilized. That led to scarcity for the people who were looking to buy houses. With fewer choices, they were likely to put in and accept the offer.
Another point of consideration is Shelter-in-place and stay-at-home provisions played a major role in lowering house sales.
But as of now, a 7.4% increase in sales has been recorded. This increasing price trend also reflects an increase in inventory for first-time home buyers.
Read Also: 7 Effective Ways To Reduce Closing Costs
Increase in New Home Sales
As per the statistics provided by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development, new residential sales were up 0.6% in April. As of October 2022, the Sales of new single‐family houses were recorded at an annual rate of $632,000 which is 7.5% higher than sales in September.
So, if you are planning to buy a home, let us tell you that the prices of both new and existing homes are likely to increase in the upcoming year. As per the housing market predictions for 2022-2023, now is the perfect time to grab the offer & buy your dream home.
Home prices will continue to climb
According to the house prediction for 2022, the increase in mortgage rates may slow down the housing market, which is a good thing though. There are several reasons why home prices are rising rapidly.
The primary reason is people working in remote areas and costlier cities are moving to affordable cities. For example, many people living in New York & New Jersey have shifted to the economic city of Florida.
Another reason is the extremely low rates for 2021. Working from home/ remotely has made people more adjustable & flexible. They know how to sustain themselves by cutting down the cost. Many employees like to work from home, as it saves their traveling time, and helps them bring more productivity.
More people will choose ARM (adjustable rate mortgages)
You must be aware of the fact that a large group of potential first-time buyers is mostly the millennials averaging from 29-33 years. The research reveals they are more interested in fixed-rate mortgages. But most of them do not stay in the same house for more than 7 years.
That’s why people are likely to choose ARM in 2022 and 2023. As adjustable-rate mortgages (ARM) are way cheaper than fixed-rate mortgages.
The statistics show that home buyers with 30-year fixed-rate mortgages hit 5.094% whereas 7-year ARM was recorded at 4.3%.
Employees are back in Offices
It is truly evident now that unemployment claims nationwide have dropped. In the early 2022’s, many people removed their masks, joined their previous jobs, or started getting new jobs. As per the 2022-2023 housing prediction, people nationwide will continue to see better growth in wages and low unemployment rates.
This restoration period is enabling people to eye at the housing market to buy a new home.
The National Association of Realtors has become Positive!
Real Estate Agents are taking surveys to stay updated about the home-buying & selling experience. It varies depending on state & location. Following the social distancing rules, they are making sure to get the job done by completing most of the paperwork online and meeting the clients only on urgent requirements following the safety protocols.
Now coming to the price point, 68% of the realtors haven’t lowered their prices, while 19% of them reduced the prices by 5%, and others lowered them from 5-10%.
Final Words
Before you invest in the real estate market, it’s important to know when the housing market goes up, and down. Let us tell you that low-interest rates, inflation, or rapid job growth are the three parameters that keep bubbling the market. Whereas it crashes due to a rise in interest rates, the loan process becomes harder, economic slowdown or unemployment.
We hope you found this detailed article helpful. Have any suggestions? Kindly leave your suggestions below!
Read Also: How Much Income Do I Need To Buy A Home?
