Not much has changed with the housing since the Covid-19 pandemic began in 2020. For the third year in a row, the market continues to boom across the Triangle with no real signs of slowing down, particularly as new businesses continue to bring growth to the region.
In fact, the Triangle is still predicted to be one of the top metropolitan areas across the United States for its hot housing market, and while the status of housing hasn’t changed significantly, a positive outlook remains for the rest of 2022. These 4 factors will influence the real estate market for the rest of 2022.
Slightly more inventory will be available
A change in demographics of buyers and sellers will be entering the marketing in 2022. As baby boomers look to downsize and millennials begin buy, more homes will start to be available. Realtor.com forecasts that Raleigh alone will see a home sale increase of 9.6 percent over 2021.
In fact, Triangle buyers are in a great position to buy and sell. For potential sellers, the amount of equity in their homes and the continued increase of home prices ensures they’ll be left with plenty of money to invest in a new home that better suits their needs. Also, many buyers are also cash-rich thanks to savings they’ve been able to build up during the Covid-19 pandemic and better jobs that are entering the Triangle, which puts them in a good position.
One major trend is many buyers will be looking for homes throughout the Triangle’s suburban communities to find the right home for their needs.
Mortgage rates may slow demand, but not much
As inflation concerns become top of mind, the Federal Reserve will begin to raise interest rates to help the economy cool down and slow the effects of inflation. Data from the U.S. Bureau of Labor shows a steady growth in inflation—up 7.5 percent from 2021 and .6 percent from December to January—which was higher than forecasted. While this is typically a scenario where the Federal Reserve would raise interest rates, they’ve been slow to do so.
Still, those rate hikes are expected to begin slowly in March and continue through quarters three and four. The National Association of Realtors projects mortgage rates to rise to 3.9% for a 30-year-fixed-rate by the end of 2022. Still, those rates remain at historic lows. While some buyers may be hesitant to buy at a higher interest rate, it’s still lower than rates from 2019, which were around 4%, which means 2022 will still be a great time to buy.
Home prices are increasing, yet more modestly
Every community across the Triangle saw increased home prices in 2021, and that increase is already continuing in 2022. Last year, Wake County’s average home price increased by 22 percent.
The good news is those home price increases should slow in 2022. Realtor.com projects that Raleigh will see a home sale increase of just 4 percent and only 4.2 percent in Durham and Chapel Hill. Despite the continued pace of growth, the increase will be much steadier for 2022.
Labor and supply shortages are holding steady
The homebuilding industry continues to be hit hardest by ongoing issues with supply shortages. It’s still taking months to get materials like windows, bathtubs, and even locks. Lumber prices have also tripled, due to Covid-19.
A Fall 2021 report from the National Association of Home Builders also shows the construction industry needs 2 million additional workers over the next three years to keep up with demand.
Still, the Wake County Home Builders Association is continuing to work on behalf of builders and the Triangle community to ensure buyers get a great home for their money, and affordability is a top priority. For anyone looking to buy new construction, be aware of the constraints of the market. The National Association of Realtors predicts a slight increase in new home starts over 2021 but expect the increase in inventory to come from existing home sales.
The Jim Allen Group provides access to information on this blog/website as a public service for educational purposes only. Although reasonable efforts have been made to ensure that all of the information made available is current, accurate, and complete…[read more]