Should You Buy A Home Now? Economists Think Prices Will Rise In 2022
Home prices are expected to rise through 2022 and most agree you should buy a home now. with interest rates near historic lows — some 15-year rates are near 2% and some 30-year rates are below 3% — many prospective home buyers are wondering whether they should buy a home sooner rather than later. Here’s what experts say about home price trends and whether you should buy now.
How Much Are Home Prices Going To Appreciate?
Of course, no one has a crystal ball that can foresee the future of the real estate market, but a report from the National Association of Realtors revealed home prices will likely climb 5.5% in 2022. Taylor Marr, lead economist at Redfin, says that while the company reported that home sales grew 16% in August, “our economics team’s view is that price growth will slow to about 13% during the last few months of this year, relative to 2020.” And for its part, “Zillow economists expect the typical U.S home value to increase 4.7% over the next three months (August-November), and to end August 2022 up 11.7% from August 2021,” according to a report the organization released in September. (Zillow’s home values take into account the prices of all homes, whether they are for sale or not.)
Should You Buy Now, Or Wait?
Potential buyers should think about their personal situation first when deciding when to buy a home, rather than trying to time the market, some experts say. “You should buy now if you’re sure you’re ready and you can afford a home. It’s best not to try to time the market. If you wait on the expectation that prices will fall in a year or two, you might be disappointed,” says Holden Lewis, home and mortgage expert at NerdWallet. And buying now could mean you lock in a very low interest rate, as mortgage rates are still near all-time lows.
Denny Ceizyk, LendingTree’s senior staff writer for mortgage, says the decision of whether to buy now depends on whether you’re financially prepared for homeownership and how long you plan to live in the home you’re buying, because even if home prices dip, they generally recover in the long run. “While home prices are rising, interest rates remain at 60-year lows, making it much more affordable to buy higher-priced homes. At some point, inflation pressures could push mortgage rates higher, which argues for buying sooner than later. If your employment was affected by pandemic-related layoffs or furloughs, it also makes sense to pad your cash reserves before you buy so you’ve got extra funds to cover an extended period without a paycheck,” says Ceizyk.
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