The spring 2022 housing market is expected to surpass all price growth records since the beginning of growth record keeping in the 1980s. According to an article recently published by Forbes.com, the rate of home price growth topped 20% in August of 2021, and while many experts predicted a decrease in 2022, some now say that slowdown won't happen. In fact, Zillow forecasts “the year-over-year rate of home price growth to peak at 21.6% in May and to close the year at 17.3%,” meaning the spring housing market is white-hot.
Inventory and Interest Rates Steer Housing Prices
It isn't easy to reconcile the nation's economic situation with a boom in the housing market. On the one hand, the costs of basic necessities are through the roof. On the other hand, homebuyers and real estate investors seem willing to pay thousands above the asking price while waiving inspections to win the bid on a property.
Extremely low inventory continues to contribute to the rise in home prices on the market. Last year, there were 26% fewer homes on the market than in 2020, and this year there are 46% fewer homes on the market than there were in 2021. A shortage of raw materials coupled with supply chain issues has also created a backlog in new construction. These inventory issues tied with low interest rates have driven up the price of homes.
Although Zillow sees history-making price growth in the coming months, some experts do still disagree. Both CoreLogic and Fannie Mae anticipate the rate of price growth will remain in the single digits for the year. These companies each assert that the rise of home prices will slow as the federal interest rate increases over the next year.
Hire a New York City Real Estate Lawyer
Whether you're buying, selling, or facing default, the knowledgeable team at the office of Melvin Monachan, Attorney at Law, is here to help. To learn how we can assist you with your NY real estate legal concerns, call (347) 389-1682 today, or contact us online.