Since the beginning of the year, the US economy has been cooling off. After several years of strong growth, rising inflation and energy costs are affecting US households in ways not seen since the 1970s. For those who are actively involved in the buying or selling of real estate, there is confusion and fear about how the economic slowdown will affect their options.
George Ratiu is a senior economist for research with Realtor.com and in a recent article, he outlined his predictions for the second half of 2022 US Housing Market.
· Mortgage Interest Rates – As the Federal Reserve continues to tighten credit flow to slow the economy and fight inflation, expect to see rising mortgage interest rates as well. Ratiu predicts interest rates as high as 6% by the end of the year.
· Home Prices – Home prices will continue to rise, but not as quickly as we’ve seen. There are still buyers in the market who will want to jump ahead of the rising interest rates and uncertainty.
· Sellers Advantage – Sellers have enjoyed a strong seller’s market for the past year and Ratiu expects this to continue for well-positioned homes. Homes priced reasonably and in good condition will continue to garner multiple offers through the rest of 2022.
While inflation and rising interest rates are affecting the US economy, home buyers and sellers should still expect the second half of 2022 to be a good market to make a move. The slower pace should also allow them to carefully consider offers, and make good decisions for their future.