Are you planning to buy a home this year? Great! You’re joining an estimated 26 million Americans who want to buy a home in 2022.
But you might want to move your home buying plans from the back-burner to the forefront. Based on the market data, you should start your search now if you want to get the best price and the best terms. Let’s look at why it makes sense to buy early in 2022 instead of waiting until later in the year.
1. Home Prices Are Projected to Rise Higher
Home values in the Bay Area (San Francisco-Oakland-Hayward Metro) have increased by 17.0% over the past year! While that kind of growth isn’t sustainable, Zillow predicts they will rise another 9.9% over the next twelve months.
As the saying goes, “the best time to buy a home is five years ago; the second-best time is now.” If you plan on buying a home this year, why not buy early before prices rise even higher? If an $800,000 home appreciates 9.9% this year, it will end the year valued at nearly $880,000. You could pay that much more for the house at the end of the year, or you could buy now and watch your net worth increase by that amount this year!
2. Beat the Flood of Buyers
Every year, we see a busy period from late spring through early fall. Buyers generally like to move during the summer when kids are out of school and it might be easier to take a break from work. So buyer competition is at its peak during this time.
If you’ve had an eye on the market over the past two years, you’ve seen how fierce buyer competition can be. All-cash offers, bidding wars, homes going for 10% above asking price, sellers holding all the negotiating power…
Now, we’re not expecting that level of competition in 2022, but we’re still facing a seller’s market. Buyer demand is still high and the supply of homes available for sale is still low. So multiple offers on a single home are still likely, and homes will probably still sell for more than the asking price on average.
Why compete with all those other buyers when you can beat them to the market? By starting your search today, you could be comfortably moved into your new home before the summer buying frenzy begins.
3. Interest Rates are Scheduled to Increase
If you’re still not convinced that you should start looking now if you want to buy a home in 2022, we have another factor for you to consider: interest rates.
The interest rate is simply the cost of borrowing money. And we’ve seen historically low interest rates since the Great Recession in 2009. In 2008, rates were above 6%. Today, they’re below 4%. A 2% difference might not sound like much, But on a long-term loan (like a mortgage), for a big-ticket item (like a house), this small percentage adds up to large amounts of money. Tens of thousands of dollars in most cases.
The Federal Reserve plans to increase interest rates by up to 1% in 2022 to combat our current level of inflation. So if you’re planning to get a mortgage for your new home, it’s in your best interest to lock in your low interest rate before the increase.
Are You Ready to Start Your Search?
With all this in mind, are you ready to start your home search? Contact the experienced agents at Sequoia Real Estate to help you in your search! Our agents have access to listings before they hit the market, are trained to negotiate the best terms possible for you, and cost you nothing since all real estate fees are paid by the seller. You have nothing to lose and everything to gain by getting a Sequoia professional in your corner.
Let’s get you in that new home as quickly as possible! Contact us today.