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Should I Buy A House Now Or Wait Until 2022

    Despite the financial challenges in the current market, there are many reasons buying a house is still a good idea for 2022. If you are financially prepared, buying a house is still a good idea – even in todays market. Some experts say buying a home right now — even with the market hot and competitive — is a great idea, considering that mortgage rates are still cheap.

    Even with the modest increase in homes on the market, buyers are still facing high prices and mortgage rates in the 6% range. For many buyers, the higher mortgage rates mean that they are no longer able to afford homes within specific price ranges.

    So, when we pair a home that is priced well above the median with higher mortgage rates, that sets the stage for buyers to be way over their heads financially. When house prices fall, homeowners run the risk of having their homes be worth less than the outstanding mortgage. Rising rental prices, and now higher mortgage rates–which jumped from averaging only 3.2% earlier this year to 5.71% in mid-June–have driven housing costs higher, pricing many out of the housing market.

    In fact, mortgage demand is at the lowest point it is been in 22 years, according to everyone, thanks to skyrocketing housing prices and rising rates. It would not be a surprise to see continued declining borrower volumes this year, particularly if rates continue to increase and housing prices remain flat. There is a good chance mortgage rates could drop even further than they are now, as markets become increasingly confident the Fed can rein in inflation.

    Higher mortgage rates may not lead directly to lower prices — supply and demand will remain the biggest factors — but they may make things a bit easier on buyers, Dietz said. If mortgage rates really are that low, this might be a great time to delay buying and save a bit of money, particularly for first-time buyers. In a sellers market, there are more buyers interested than available homes, and this makes this a tough time to buy a house, especially for first-time buyers.

    If the markets you are looking at do not have any shortages of homes for sale, waiting can save some money. If you are willing to put off planning for several years, you can probably score a discount on your house. So, if you are in a stable, reasonably priced housing situation right now (say, you just signed a one-year lease at a reasonably priced rental), it might pay to delay plans to buy until the real estate market cools down.

    To justify a trade-up, it is smart to have reasonable confidence you will not be moving again any time soon–or that you will be financially stable enough to keep a house and rent it out. If you think that you would like to sell the house in 5 years or less (due to moving, growing a family, etc), the math may not be there to justify buying a house — since you have to pay closing costs when buying as well as selling, and this may not allow the house long enough for the appreciation to make up for those costs. So, if you are thinking about buying a house, you may want to hold off and wait for at least one year. Provided that your finances are good, you have a secure job, can afford your monthly payments, are working with an experienced realtor, and are staying put for at least a couple years, buying a house in 2022 is not a wasted dollar, experts agree.

    Experts mostly agree buying and owning a home remains a wiser financial move for many people than renting. Because homes are the largest single purchases that most people will make during their lives, it is critical that you are in a strong financial position before jumping in. Naturally, some homebuyers are concerned that buying a house is a waste of money, since housing prices are overvalued – if they fall, it can result in net financial losses for people who bought during peak markets. High housing prices may seem like an incentive to people to sell the house and cash out, but most of these people will need to purchase another house, paying these higher costs.

    One of the biggest reasons prices are soaring is because so few homes are for sale. A tighter housing market means new construction is more critical to buyers trying to land a house. In 2022, rising mortgage rates are piling on top of record-breaking house prices, locking in more prospective buyers in the hot real estate market. Rising mortgage rates — they went from nearly 3.3% earlier this year to nearly 5% just three months later — are likely driving some buyers from the market and slowing down rising house prices.

    Various projections by experts suggest 2022 is going to be a sellers market for homes, with house values still likely rising in the double-digits. A group of economists convened by the National Association of Realtors predicts median house prices to rise 5.7% in that year, and a group of real estate experts polled by Zillow predicts that house values will rise 6.6% in 2022. This piece notes, Zillows Market Forecast believes that US house prices will increase 11.8 percent by April 2022. Zillows economic research projects that annual house price appreciation would rise to 13.5 percent by mid-2021, with home values rising 10.5% by late 2021, from current levels.

    Even if buying a house costs you 10% or 20% more today compared with one year ago, you are likely to be better off in the long term, provided that you stay financially stable and remain in your home long enough to accumulate equity through market appreciation. Even if you could swing the house with todays prices and lending rates, it likely would not be a great investment.

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