The pandemic has created a frenzied market with no foreseeable downslide.
Low inventory coupled with the worries of job stability and rising mortgage rates has hindered potential buyers, particularly millennials, from acquiring a home.
- During the pandemic, the inventory was low as buyers rushed into the market to acquire homes.
- Potential buyers are trying to own homes with the low mortgage rates before the Federal Reserve increases inflation, which causes the mortgage rate to spike up.
- According to Zillow’s analysis, home prices have risen the quickest in family-friendly homes, which has consistently been the homestretch for American millennials
Perhaps even more distressing is the upward trend in rental prices
- While home prices in 2022 are expected to rise at a considerable rate (2%), the rental market is projected at 3 times this growth rate (6%)
- This will continue to create a considerable financial strain on the homeowner and the tenant
Zillow’s predictions for the housing market coming year are particularly alarming
- Not everyone agrees with Zillow, others predict home prices will only grow around 3.5% to 7.6%.
- As previously stated, as homes and rents are increasing, there will continue to be elevated concerns about job stability.
- Before anyone can predict what the housing market will look like, we will have to see what the mortgage rates become after the Federal Reserve has it’s series of interest rate hikes.