It’s the beginning of summer. It’s a great time for pool parties, barbeques in the backyard, and selling a house. The housing market is hot, with mortgage interest rates hovering above 5%, homes selling for 10% above their market value, and a tight supply of homes for sale. Answer important questions and gather all the details with this expert guide to 2022 summer housing market trends!
Pandemic uncertainty meant fewer people chose to move out due to economic concerns. At the same time, demand is higher because people now have a greater ability to work from home and relocate to a less expensive area. Millennials are also now approaching home buying age.
Millennials made up the largest share of home buyers at 37% in 2021. Younger Millennials, ages 22 to 30, were 14% of home buyers. Older Millennials, ages 31 to 40, are at 37%. Additionally:
- 2% were Gen Z buyers, ages 18 to 21
- 24% were Gen X buyers, ages 41 to 55
- 18% were Younger Baby Boomers, ages 56 to 65
- 14% were Older Baby Boomers, ages 66 to 74
- 5% were from the Silent Generation, ages 75 to 95
Housing bubbles start with high demand and low supply. Buyers and investors rush to purchase properties as the supply starts to drop because they predict there will be more demand for homes in the future. Plus, low-interest rates and loose credit can bring borrowers, those who take out home loans, into the market and fuel demand.
However, once demand decreases or stagnates at the same time supply increases, prices drop sharply and the bubble bursts. The housing bubble of 2008 was not that long ago. Banks and other financial institutions engaged in predatory lending practices by approving people for mortgages they couldn’t afford. Lowered lending standards, irresponsible speculation, defaults, and foreclosures also played a part.
Home buyers should avoid panic buying by knowing what they can afford and sticking to a realistic budget. Be patient and ask yourself the following questions:
- Are you debt-free?
- Do you have an emergency fund for 3 to 6 months of expenses?
- Will your mortgage payment be 25% or less of your take-home pay?
Home sellers should present their homes in the best possible way. You can renovate your home and increase your return on investment. Cleaning, decluttering, and organizing go a long way in making your home tidy. Bright lighting will also make your home feel more spacious. These steps help buyers envision themselves as the new homeowners.
Make the process of buying or selling your home as stress-free as possible by working with a knowledgeable real estate agent at The Massey Team at Berkshire Hathaway HomeServices Select Properties. Our team has over 45 years of combined experience and has listings in St. Louis and across the river in Illinois. Simply give us a call at (618) 791-5024 or (618) 791-9298 to talk with a member of our team!