We are coming to the end of 2021 and there is still a question from interested buyers: will they have better luck in 2022 to buy themselves a new home?
According to Realtor.com’s 2022 Housing outlook, a whirlwind year is ahead for buyers across the biggest U.S. markets – and the New York metro area is no exception.
Overall around the US local home prices are expected to rise by 2.3% in 2022 over a recent median of $619,000. Housing affordability will be a growing consideration. While buyers who act quickly may have a better chance to find a home in their budget, with inventory expected to recover from COVID-19 lows, home sales in the New York-Newark-Jersey City area are forecasted to drop 3% in 2022.
According to Realtor.com, 2022 will become a very competitive year because home sales hit a 16-year high and trends like workplace flexibility enable more homebuyer success. The recovery will also begin from recent declines caused by COVID-19, as stated for-sale home supply is up by 0.3%, and affordability would become more complex with regard to the fact that mortgage rates climbed to 3.6%, listing prices rose to new record-highs such as 2.9% — rents surge rose by 7.1%, while incomes increased by 3.3%.
“Affordability will increasingly be a challenge as interest rates and prices rise, but remote work may expand search areas and enable younger buyers to find their first homes sooner than they might have otherwise. And with more than 45 million millennials within the prime first-time buying ages of 26-35 heading into 2022, we expect the market to remain competitive,” says Chief Economist Danielle Hale.
The researchers from Realtor.com expect home sales to grow up to 6.6% year-over-year and hit the highest levels in 16 years which will lead to a pretty competitive market in upcoming 2022. Recent survey data showed that 53% of millennials are buyers who plan to purchase their first home within the next year.
In 2021, low mortgage rates helped buyers manage their monthly housing costs. Despite the fact that rates tend to rise in 2022 by 2.9%, the income increase of 3.3% and declining unemployment will help keep homeownership in reach for buyers.
Speaking of New York-Newark-Jersey City in particular, the report forecasts a decrease in sales growth by 3% and an increase in price growth by 2.3%. According to Realtor.com, during the pandemic and COVID-19 viewers of suburban home listings rose by 42.1%, they expect suburbs to continue to be more popular than big urban metros as home shoppers search for relatively affordable and larger homes.
To read the full report, visit 2022 Housing Forecast.