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The real estate market shows no signs of slowing down in 2022. Demographics, low-interest rates, and the ever-evolving landscape of the workforce continue to drive buyer demand. The housing market forecast for 2022 is complex yet promising as builders across the country continue to show their unwavering commitment to creating new housing inventory.

Housing Market Predictions 2022

New Construction: 

Builders’ sentiment is high as we enter 2022. The NAHB metric rose to 84 in December, which ties for the highest reading of the year. Single-family starts ended 2021 at 24% higher than the pre-covid numbers in 2019.

The biggest constraints for builders will continue to be the lack of skilled labor, the cost of building materials, and the shortage of available lots. Builders will continue to decrease the housing deficit in 2022 in numbers similar to 2021.

Home Sales:

Inventory will continue to be a driving force of the 2022 housing market. According to chief economist, Danielle Hale, home sales are expected to increase another 6.6% and home prices to rise another 2.9%.

“The 2022 housing market will continue to be a seller’s market with fast-moving homes and rising prices, but the competition should be a bit less intense than we’ve seen recently.” Chief Economist, Danielle Hale

Bidding wars will remain an issue amongst the millennial generation as inventory of starter homes is the most deficient. Houses will continue to sell in record time.

Mortgage Predictions:

In 2021 mortgage rates hit a record low of 2.65% but rose .5% by the end of the year. Experts predict that rates will continue along that trend and rise about another .5% but are not expected to exceed 3.5% by year-end.  

This gradual increase in mortgage rates will put a damper on housing affordability, even as rates remain at historic lows. This increase will also slightly ease buyer demand and slow down the surge of home prices

How to Maximize Momentum in the 2022 Real Estate Market

  • Optimize your pre-listing materials. Over one-third of new construction homes are sold before development has even started. Virtually stage your home plans to allow buyers to envision themselves in your projects.
  • Utilize technology to work around supply-chain issues. The new Builders Capital technology platforms, and BIMQuote, allow builders to upload plans and generate material takeoffs allowing builders to order in advance and stay ahead of shipping times.
  • Build properties in high demand. Focus on markets that are picking up steam. Economists predict that there will be an influx of buyers looking for vacation homes in 2022.
  • Gain access to flexible capital. The ability to access capital quickly and reliably is an integral part of navigating a fluctuating market. Our W.R.A.P. loan (Warehouse Revolving Asset Pool) allows builders to acquire land quickly as it becomes available without needing to go through a new loan application process.

The housing gap shrunk in 2021 and is poised to decrease even more in 2022. We are witnessing the beginning of a shift toward a more balanced housing supply, in large part due to the ongoing prevailing efforts of builders nationwide. Builders Capital is here to elevate the standard of construction lending by providing innovative solutions to help your business navigate market changes.