Our agents know financing is one of the big questions on buyers' minds. Whether you're looking for Ridgewood homes for sale or searching elsewhere in Bergen County, it's important to know what you can expect.
Throughout 2021, buyers and sellers alike experienced a housing market unlike any other in living memory. Buyers benefited from tremendous credit availability, often at historic low interest rates. This has enabled many to leap into the market far earlier than planned.
At the same time, sellers have been benefiting from low supply in relation to demand. Over the last few months, this has developed into a "seller's market." Many sellers who only attracted mild interest in their homes before are now getting offers from three, four, or five bidders.
What does the future hold for buyers in 2022?
While there is no way to predict what will happen next, some trends are clear. There is still a possibility an unforeseen issue, like a new COVID-19 development, may change the calculus for buyers and sellers, but that doesn't mean you can't get informed and prepared.
Let's dive in and examine the biggest factors that affect financing in 2022:
Historic Low Interest Rates Will End, But Nobody Knows When
The lowest interest rates in generations can't last forever. These rates have allowed countless buyers into the market, saving them hundreds of thousands or even millions of dollars over the lifetime of their loan. But interest rates may tighten any time, led by changes at the Federal Reserve that affect all lenders. When this happens, buyers will need to reach higher qualification standards to get a mortgage.
First-Time Homebuyer Programs Will Gear Up for the Future
Even though easy credit may soon come to an end, first-time homebuyer programs such as those led by the VA, HUD, and USDA are changing. There are many signs that these programs and others will soon be offering loans into the millions of dollars for the first time. These changes are necessary to help buyers keep pace with the ballooning costs of homes in many places throughout the United States.
More Sellers Will Enter the Market to Avoid Missing the Boat
Over the last several months, many potential sellers have looked at the unfolding market situation with consternation. They want to sell, but they worry about entering the very same housing market as a buyer. Now, more are deciding to take the plunge—even if it means renting for a while in the aftermath. This may ease supply concerns and slow the pace of price growth in some areas.
Investor Activity Will Continue to Be a Hassle for Buyers and a Boon to Sellers
One of the unique things about today's housing market is that ordinary buyers are finally in a position to compete, at least somewhat, with ultra-wealthy real estate investors and house flippers who arrive with cash in hand. Investor activity is largely independent of price action, since investors stand to profit in the long run from rising cost. So, they will continue to compete, and often defeat, primary residence buyers.
It Will Be Even More Important to Have a Good Real Estate Agent
While today's market offers many opportunities, it is also even more complicated than usual. It's crucial to have an experienced real estate agent on your side. Your agent is a guide who can help you avoid pitfalls and reach your goals, even if it takes several tries to find the right home.
Contact us to find out more or get personalized advice for your situation.
