Supply Chains & Limited Inventory: The Latest Housing Market Updates
Real estate markets constantly change, responding to larger economic forces, but the last two years have completely roiled the housing industry from coast to coast. For new home buyers, the challenges have included ongoing supply chain issues, limited inventory, rising home prices & interest rates, and complications getting pre-qualified for a mortgage.
If you’re going to be searching for a new home in 2022, here’s what you need to know.
- Supply Chain Issues. Shortages and volatile lumber prices continue to complicate the housing industry, adding weeks to building timelines. Building material prices rose nearly 20% in 2021 alone, and everything from appliances to the smallest pieces of pipe have become even harder to come by as the global supply chain issues continue. Builders are doing what they can to keep things moving.
- Availability. Lack of inventory has driven up demand for new housing. (The market is so tight that homes go under contract in a matter of days.) The housing market was particularly robust in 2021, with high demand for homes in almost every area of the nation. The same trend will follow in 2022. Market predictions indicate that while inventory will remain tight in 2022, price appreciation will be slower.
- Mortgage Rates & Home Prices. Low mortgage rates (combined with tight inventory) have created a red-hot housing market. Industry experts are predicting that mortgage rates are expected to increase but remain relatively low, while home sales will reach a 16-year high. Over the past year, national home prices have increased by 20%. Affordability remains a concern, as home prices continue to rise, but at a slower pace than in 2021.
Why Now is Still a Great Time to Buy
The good news is that interest rates are still relatively low (though rising!), which makes buying your new home in 2022 a smart decision. Even with the added cost of lumber and materials, you can still afford "more house" than you imagine.
Existing “used” homes continue to be hard to come by… not to mention dealing with multiple offers over asking price and buyers willing to waive inspections. With a new Ernest home, you know you are getting a well-built home that was designed by you, for you!
Here are some tips to ensure you’re ready to hit the ground running:
- If you are ready to start your new home search, be prepared to act quickly! You need to have everything in order — mortgage pre-qualification, financial paperwork, your list of wants & needs. (This is no time for disorganization or indecision!)
- If you find a community or home you like, join their interest lists. (Once homes are released they go FAST. The earlier you join, the better chance you have!)
If you’re ready, we’re ready! Contact us today to learn more about moving into the home of your dreams sooner than you ever expected.