Last Updated on January 31, 2022 by Maggie Sutton
In 2021, the supply and demand imbalance fueled runaway house prices, as well as incredible competition as the limited supply of housing available was snapped up quickly. Sellers were clearly in control and there’s unfortunately no sign of that dynamic abating in 2022. According to the latest Market Pulse Report from HouseCanary, a real estate valuation brokerage, inventory levels dropped again in December to near-record lows. HouseCanary expects the nationwide shortage of homes for sale to persist well into the spring, projecting another double-digit home price increase by the end of 2022.
Today’s Housing Shortage by the Numbers
A low inventory environment, coupled with inflation rates at their steepest in 40 years, means it’s very likely 2022 will bring another double-digit increase in national home prices, with price growth in the 10-12% range.
As home prices trend upward, listings of cheaper homes also drop off. According to House Canary, over the last year, home listings in the $0–$200,000 range have dropped by 19.9%. Homes in the $200,00–$400,000 decreased by 4.5%. The percent of listed homes in the $400,000-$600,000 range rose by 27.4%, while homes in the $600,000-$1M and $1M+ rose by 41.2% and 39% respectively.
In December, the median price of all single-family listings in the U.S. was $373,619 and the median closed price was $383,395. On a year-over-year basis, the median price of all single-family listings is up 7.3%. The median price of closed listings is up 15.1%. However, the median home price has dropped 2.2% since November while the median closed price increased by 0.3%.
How You Can Buy Despite the Housing Shortage
With a low supply of homes and consistently high demand, many would-be buyers are struggling to secure their dream home with the brutal competition in the U.S. housing market. Here are some steps you can take to compete in today’s hot housing market.
Have your financing lined up
Before you fall in love with a property, make sure you get a mortgage preapproval from two or three lenders. Official Loan Estimates will help you compare interest rates and costs to find the best deal for you. Financing issues account for 37 percent of delays to the closing table. A seller wants to minimize the potential for issues.
In any hot market, a preapproval shows sellers that you’re serious. In today’s pandemic market it is sometimes a requirement to view a property in person, either because sellers are anticipating many offers or they simply want fewer strangers in their homes.
Find the right real estate agent
Finding the right real estate team is a huge advantage in a competitive market. A good agent with a lot of experience will act as your advocate. They’ll help you navigate a tough market with ease. For more information, check out Step 4 in this post.
Ask about special mortgage programs
Whether you’re a first-time home buyer or just a little short on cash for your down payment or closing costs, you may be able to qualify for a special mortgage program that could help. These programs help buyers purchase a home even if they have challenging circumstances, like less income or no down payment.
Government-backed home loans, closing cost assistance programs, and low down payment mortgages are just some of the types of programs that are available. Your mortgage professional can help you find out if you qualify.
Homes for Heroes also offers Hero Rewards after every housing transaction. On average, heroes can save $2,400 when they use a Homes for Heroes real estate and mortgage specialist. These savings are given directly back to you as cash, and can be used to cover anything from closing costs to buying new furniture, or something a little more fun like a vacation. To get started with a Homes for Heroes specialist, sign up here!