Top 5 Mortgage & Housing Trends Affecting Buyers in 2022

Published:
March 24, 2020
Last updated:
April 6, 2022
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Last year brought up a whole range of new and exciting questions about homeownership and real estate trends in the U.S. Many analysts and experts have offered their commentary on the state of the U.S. real estate market and the issues which will likely affect buyers throughout this present year. 

When we examine the market, we can see many of the same issues today which we’ve seen in prior years. But 2022 will likely have its own set of unique issues to think about. If you’re a buyer surveying the real estate market, you’re probably wondering about the trends which will have the biggest impact on your ability to buy a home in 2022

In this post, we will identify and discuss the top 5 mortgage and housing trends which will affect home buyers in 2022. In addition to these trends, home buyers may grapple with other factors that impact their ability to enter the market. But these trends are sure to be among the most important.

As we will see, 2022 presents something of a mixed bag for buyers. On the one hand, buyers will be pleased to know that loan limits have increased and that most expert commentators predict that mortgage rates will remain low throughout the entire year. 

On the other hand, the real estate market may have certain structural issues that make it difficult for buyers. Let’s go over the top 5 home buyer trends in 2022, one by one.

To recap, we will go over the following trends:

  • Loan limits have been increased
  • Mortgage rates may stay under 3%
  • Homeowners will be less eager to sell
  • Inventory will likely remain low
  • Affordability will remain a key issue

Loan Limits Have Been Increased

The first trend to note is a mortgage trend. Throughout the country, loan limits for FHA, VA, and conventional mortgages have increased in most counties. Loan limits refer to the maximum amount which can be borrowed by a buyer before the loan becomes a “non-conforming” or “jumbo” loan.

As we know, loan limits are set at the county level. This makes sense because different markets around the country have vastly different median home prices. It makes little sense for an expensive market, such as Bellevue, WA, to have the same loan limit as a much less expensive market, such as Biloxi, MI. 

What’s more, loan limits are also adjusted according to unit size. A one-unit home will have a lower limit than a two or three-unit home within the same county. Throughout most of the country, the loan limit for a one-unit home has been raised to $647,200 for conventional mortgage loans. In other, more expensive markets, such as King County, WA (which is where Seattle is located), the loan limit for a one-unit home has been raised to $891,250.

Mortgage Rates May Reach 4%

The next important trend affecting home buyers in 2022 is also a mortgage trend. As of this writing, mortgage rates for 30-year fixed-rate mortgage loans are averaging about 3.11%. That’s quite low. 

Real estate and finance experts predict that mortgage rates throughout the country will remain low consistently for the rest of 2022, though they may creep up. This applies specifically for 30-year fixed-rate mortgage loans. 

As one example, the team at the Mortgage Bankers Association (MBA) predicts that the year 2022 will conclude with an average 30-year fixed-rate mortgage interest rate of 4%. 

Low rates translate into lower monthly payments and lower overall mortgage loan costs, so it’s best to take advantage of rates when they’re low when buying a home. When you consider a loan over its entire 30-year duration, even a slightly lower interest rate can make a very big difference financially.

View Current Mortgage Rates

Homeowners Will Be Less Eager to Sell

In years prior, homeowners in the U.S. tended to sell their homes after residing in them for only a few years. This trend was so dependable that it was documented by the National Association of Realtors. 

The NAR noted that major life changes and events tended to cause Americans to buy and resell their homes fairly quickly. In fact, in 2010, homeowners only tended to stay in their homes for about 8 years before turning around and selling. And this is only the average; a great number of homeowners sold their homes in fewer than 8 years. 

The main reasons for this quick turnaround were things such as job changes, having children, moving closer to family, and other major transformative things. But now, fewer American homeowners are undergoing the sort of changes which might necessitate selling their home

This trend may contribute to less inventory and a more seller-favored market in 2022 and beyond.

Inventory Will Likely Remain Low

Another big trend affecting buyers in 2022 relates to inventory shortage. Many real estate analysts have commented that inventory will remain low in 2022 as a result of slow construction pace. 

If homeowner’s become much less willing to sell, as predicted by many analysts, we may begin to see a highly competitive marketplace. Though inventory will likely be low for most buyer categories, things appear to be especially low for entry-level buyers looking for starter homes. 

Simply put, not enough starter homes are being constructed to meet the demand of young, first time home buyers. According to the U.S. census bureau, a bit more than 2 million households were expected to form in 2018. However, only about 1.25 million homes were being constructed during that same year. 

That’s likely to leave many would-be first time buyers out in the cold. We may see many would-be buyers leave the market and continuing to rent against their desire. What’s more, the newly constructed homes which are available are typically more expensive than most first time home buyers can afford.

Affordability Will Remain a Key Issue

This last trend was hinted at in our last trend. One of the big trends for 2022 affecting buyers is affordability. The demand and supply structure of the housing market has created either a buyer’s market or seller’s market depending on the price. 

For homes priced between $150,000 to $400,000, there are more potential buyers than there are sellers. This creates a seller’s market in which there is a high probability of competing offers and bidding wars

For homes priced above $500,000, the opposite is true: there are more sellers than buyers, and this gives potential buyers more of an advantage when it comes to price negotiation and terms. The low supply of less expensive homes has caused a big drop in the percentage of first time home buyers as a percentage of total home buyers. 

First time home buyers account for around 33% of all home buyers. This is well below the average of 39% which has remained in place since 1981. Unless we see a change in inventory, this situation is not likely to change dramatically in 2022.

Contact Sammamish Mortgage for More Information

This is a lot of information to digest. We’re fully aware of that. Simply put, there’s a lot going on in the real estate market in 2022. If you’re interested in entering the market in 2022, these are trends that you should definitely keep up-to-date on. If you’d like clarification of anything we’ve discussed, or would like additional information, reach out to Sammamish Mortgage today.

The mortgage experts at Sammamish Mortgage are well-versed in the trends affecting home buyers in 2022 and would be glad to deliver their expertise to you. Contact us for more information, or click to View Rates to see current mortgage rates. You can also get an instate Rate Quote, or even Apply Now to jumpstart the process by going to our automated online application page.

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