The housing market in 2021 was a battlefield for buyers. Prices rose, bidding wars were commonplace, and demand remained strong. Now in 2022, the market is becoming more manageable when compared to the same time last year. Here are the signs that show the housing market is settling down.
Slower Home Appreciation
Prices on active home listings have declined which is leading to a healthier housing market. Current appreciation is still well above the average for it to be considered balanced but the growing amount of price cuts is a great indicator. The number of active listings seeing price reductions prior to selling has been steadily rising.
More Affordable Listings
Finally, we’re starting to see a rise in starter home listings on the market. The main contributor to this is the ending of mortgage forbearance plans for many homeowners. With mortgage payments for homeowners who utilized this option no longer being paused, those who are currently going through financial difficulties are deciding to sell their homes to pay off their mortgage.
Less Bidding Wars
In 2021, there was a time that nearly three in four buyers were up against other offers. While bidding wars are still above pre-pandemic numbers, we’re starting to see buyers refraining from using aggressive tactics like waiving home inspection contingencies and bidding well over the asking price. Another indicator that is important to pay attention to is the mortgage application volume, which is at
one of the lowest points it has been since early 2020.
More Days On The Market
The days it takes a home to sell has been steadily rising which shows that the current urgency on the market is not as vibrant as it was in recent months. There are fewer and fewer properties disappearing seemingly overnight. Now is a perfect opportunity for hopeful homebuyers to snag the ideal home they’re looking for.
Don’t Expect A Buyer’s Market
The market is still hot! It’s beginning to level out but it is still currently a seller’s market. When comparing it in its current state to some of the peaks in the past year or so, the market is noticeably slowing down. What people tend to forget is that these record-breaking numbers and stats are just that, record-breaking. The housing market is settling down, but just because the current market is no longer reflecting these numbers – doesn’t mean it still isn’t historically high.
Time is of the essence, if you as a buyer are contemplating whether or not to submit an offer on a home that has caught your eye, move quickly or it will pass you by.