The Covid-19 pandemic upended the home-buying process. Historically-low mortgage rates coupled with an inventory shortage created a red hot market, with houses selling within hours of being listed, often for well over asking price.
No one knows exactly what the future has in store. But housing experts tell CNBC Make It that in 2022, buyers can expect similar trends to the past two years: elevated prices, low inventory and fast turnaround.
That said, although it will continue to be a sellers market — home values are expected to increase by double-digital percentage points, Zillow predicts — it won't be quite as wild as it was this year, says Skylar Olsen, principal economist at Tomo, a home-buying app.
"None of us can promise that [finding] housing will be easy," says Olsen. "But it feels reasonable to promise that it will be easier than this past year."
With that in mind, here's what you need to know if you plan to buy a house in 2022.
Even before the pandemic, there was low housing stock in the country. And Covid-19 supply chain troubles and a labor shortage have only made things worse. Though builders are trying to ramp up production, inventory will remain scarce.
In fact, the number of homes actively listed for sale fell to a record low at the end of November, CNBC reports. Though there will likely be more listings in the spring and summer, as is typical, it is unlikely there will be enough to meet demand, according to Zillow research.
"The gap shrunk in 2021 and will likely shrink again in 2022, but the housing shortage will be a defining feature of the market once again next year," read Zillow's 2022 housing outlook.
The Federal Reserve is expected to raise interest rates a few times in 2022, which means mortgage rates will likely rise. Both Redfin and Realtor.com predict a 30-year-fixed mortgage rate will reach 3.60% by the end of 2022, compared to an average of 3.30% now.
That's not necessarily bad news for buyers, Olsen says. The "silver lining" of higher mortgage rates, she says, is that fewer speculative buyers will be in the market, because there is less money to be made. That could help the average person.
"When you have higher interest rates, it becomes more of the people who buy homes just to live in them," says Olsen. "That's something the market will benefit from, coming back down to sanity."
Those hoping competition will slow in 2022 are out of luck, according to economists from Zillow and Realtor.com. Economic trends including tight supply, elevated demand and low mortgage rates will continue to give sellers the upper hand.
Potential buyers can expect bidding wars on many homes, particularly in the spring and summer. While no one can predict exactly what will happen, the trends listed above mean prices will continue to climb. In fact, Zillow predicts home values will rise by 11% in 2022 — not as much growth as in 2021, but still substantial.
Millennials, who are at peak first-time home-buying age, will remain at a disadvantage compared to older generations when it comes to buying a house, says Olsen.
This is not only because homes are so much more expensive now than they were when baby boomers and older generations were buying their first homes, but because Boomers are staying in their homes longer as they live longer.
That means more and more first-time homebuyers are likely to need financial help from family and friends to make a down payment, says Olsen. Obviously, that will limit who can buy a house.
Housing affordability in the U.S. has been an issue for buyers, particularly young ones, for some time. But the issue has only been exacerbated since the onset of the pandemic, and will continue.
"When buying a home in the next year or longer, it will be important to watch new listings, including 'coming soon' listings, and be very prepared to not only visit the home quickly, but prepare to decide and extend an offer almost immediately," Glenn Phillips, CEO and lead economic analyst for Lake Homes Realty, previously told CNBC Make It.
That said, don't overpay. Prices will be up, but that doesn't mean to take something outside of what's reasonable for your budget.
Compare home prices from the prior year in your local area to the listings you are currently considering. If the same type of house is listed for significantly more, it makes more sense to wait for something else.
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