Things to Consider Before Buying a House in 2022 

You’ve been watching and waiting, wondering when the right time is to buy a home, and you have decided that 2022 is your year. If this is the case, then you need to know how to prepare for buying a home and what to expect so you can make the dream of purchasing your home a reality.


After all, it has been a seller’s market since before the COVID-19 pandemic began, and it has only become more so in the last two years. Low inventory and stiff competition are in stark contrast to almost-record-low interest rates, but nothing is static. While the 2022 market will likely see some changes, it is important to understand what lies ahead and how to prepare when buying a home in 2022.


What to Expect when Buying a Home in 2022

You need to know what lies ahead. No, there is no crystal ball that can tell use for certain what the housing market will be like. However, there are four factors that may shift, and you will need to take them into consideration when buying a home in 2022.


Competition will remain high

The low inventory of new construction and resale homes that has been seen throughout 2020 and 2021 will continue with little relief. Yet the number of people wanting to buy a home is higher than ever. Some people have even been buying without seeing the property in person.

The reality is that people are moving out of the city. People are moving to homes that offer better home office space. People are moving to where their new job is. People are buying second homes. And this buying trend is set to continue into 2022. That means there will be lots of people vying for the same homes you are, and prices are high, making it difficult to snag that dream home for the price you want, if you can get it at all.


You may have limited housing options

There is still a huge shortage of new construction and resale houses on the market, to the tune of nearly 4 million homes. While this shortage is likely to slow down to a small degree, it still means that your options as to what is available will be limited. For instance, it may be difficult to find a detached single-family home, and you may have to opt for a townhouse instead. Or you may have to get a smaller home than you wanted. It’s important to prepare for this possibility and decide if you are ready to make that tradeoff or if you would rather wait and find the perfect new home near you.


Interest rates are likely to rise

The Federal Reserve has already made the announcement that they will start cutting back on purchases of mortgage-backed securities and bonds. That means that mortgage rates are set to start climbing again. The Mortgage Bankers Association predicts the 30-year mortgage rate will hit 3.3% in the first quarter of 2022, and 3.7% in the second quarter.

This means financing your home will cost more, which in turn means you may have to scale back in terms of what you can afford, perhaps by as much as $49,000. Depending on what you can truly afford, this may make buying a home more difficult. While this may seem all doom and gloom, remember, many programs exist for first time home buyers to help ease some of the burdens of down payments, better match loans to lifestyle and more.


The appreciation of your home will be slow

It is a good thing that the increase in housing prices is expected to slow at least somewhat in 2022. However, that means if you buy a home in 2022, the value of your property won’t appreciate as quickly as you might like. The projections have the appreciation of homes in 2022 to be between 2% and 7%. If you sold your home within a couple of years of buying it, you would still make a profit, but nothing truly substantial.


How to Prepare when Buying a Home in 2022

With the above information on what the housing market will be like in 2022, here are some tips for buying a house in 2022:

  • Go back to the drawing board and recalculate what you can afford to be sure you take into account potential changes in interest rates.
  • Make sure the home you choose will meet your needs for the long haul and be prepared to compromise on size and other features.
  • Make sure you have a good handle on property values and the level of competition you are facing before making an offer.
  • Don’t get emotionally attached to a property because competition is stiff, and it can easily slip through your fingers.
  • Don’t get drawn into a bidding war and allow yourself to go over your budget.
  • Consider writing a short letter to the seller when you want to make an offer, letting them know why the house is important to you—this could tip the scales in your favor if you tug at their heart strings.

There is no doubt that making the decision to buy a home in 2022 is not an easy one. With the unpredictability facing us today in terms of job security, the economy, and other aspects of life, the choice to buy a home is more significant than ever. Weigh your options carefully, and if you decide buying a home in 2022 is the right move for you, take the steps above to make sure the experience is as positive as possible.


Connect with us today to find out more about buying a home in 2022, how much it might cost to buy a home in 2022, and where you can find an affordable new construction home near you.


Looking for more Foundation tips and learning? Return Home here.

Published 02.24.22

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