It is no secret that it has become costly to buy a home for the last two years in the United States. 

In 2021, the average price for a house went up by $50,000 compared to 2020. That year, it had an average of nearly $375,000. 

Some prospective buyers have probably hoped that the 2022 housing market will be more affordable. 

Is the 2022 market suitable for the buyers or the sellers? This is what to watch for next year. 

Rising Interest Rates 

One thing that buyers should expect in 2022 is for the mortgages to have higher interest rates than they may have seen in the last two years. 

A sign of this is that the average mortgage rate was sitting around 3.22% during the first week of the year. In comparison, this time, in 2021 was seeing an average rate of about 2.65%, and in 2020, it was about 3.72%. 

This suggests that the interest rates may be trending back in the upward direction, and if it only continues to increase, that could mean that buyers might get more anxious to lock down a house. 

Rise of the Millennials 

For the last two years, a notable part of the housing market has been the scarce supply of houses available on the market. Now, add in the fact that in 2022, about 45 million millennials will be at the home-buying age. 

If more millennials continue to want to buy homes, this could mean that an entirely new audience will create demand. Considering that demand was part of the reason why the housing market has increased by so much in the last two years, this could be a sign that it is on its way up again. 

Supply Available 

So far, there has not been much indication that the supply of houses available for buyers will improve. Part of the reason for this is inflation, and another part is the fluctuating prices of supplies to build houses. 

When it comes to the lumber needed to build those houses, that has gone from record highs to dramatic lows throughout the last year. Now, it appears that the price is going up once again. 

If it were to continue in that direction, it would make it more difficult for new houses to get built. No houses being built would mean that there would be fewer real estate sales available, and existing homes would be more valued. 

On top of this, with inflation being an issue in people’s daily lives, it could mean that someone who wants to build a house to sell would have to pay a constructor a lot more money than they would have a few years ago. 

Learn More About the 2022 Housing Market

These are just three things that you need to keep an eye on in the 2022 housing market. If inflation and supply do not get under control, it could be another year of expensive houses for sale. 

For more relevant information, see our Home Buyers section.