With COVID-19, inflation of goods and services, and fluctuating unemployment rates, you might be wondering what the housing market in Charleston, SC, will look like for the rest of the year now that things are finally settling.
According to experts, the housing market has seen its share of ups and downs since 2019, and as 2023 draws closer, home buyers and sellers can expect the trends to stay predictably steady. But what can be expected in the final quarter of the 2022 housing market?
What to Expect
Many moving parts determine what could happen in the housing market. Rent is increasing. Home prices are finally starting to decrease after remaining at staggering heights for the last few years. Mortgage rates are increasing and will likely hit 9% by the end of 2022, and beyond may see 10%. New home construction is trending down as the cost of building a home continues to soar, and homebuyers have lost a lot of buying power due to increased interest rates. We are at the front end of a changing housing market cycle and the start of a housing recession. Yet many people still have to move.
Mortgage Interest Rates
The Federal Reserve will continue to tighten credit flows in an attempt to keep the economy steady and fight off inflation. Some experts predict that mortgage interest rates will potentially increase to 9% by the end of 2022, with no signs of a decrease in interest rates soon.
It’s unlikely for rates to decrease significantly in the next few months, but there may be a slight drop or leveling off. If inflation rates continue to drop along with a decrease in housing demands, then mortgage rates can follow suit to a small degree.
Property Prices
Some experts project that the prices of homes will continue to stay moderately high compared to previous years. With the increase in the cost of building materials, labor, and land, new home build prices are at a record high and don’t show signs of decreasing as the inflation of material costs stays at record rates.
Pre-existing home sales are starting to trend down. Sellers who have to sell in the next few years, should sell now to get the best offers possible with the uncertainty of the market ahead. Even though home prices are lower than earlier this year, they are still significantly higher than they were in 2019.
Home Availability
There is a projected increase in property inventory by some experts, meaning that the market will have more inventory as sellers begin listing their homes and buyers start searching the market. The increase in the available property is beneficial to buyers because it puts downward pressure on home prices.
Buyerswill have a larger home inventory to select from, and sellers will have more competitive buyers although they will get less money for their home if they wait as opposed to selling now. The increase in available homes will keep the market competitive, but the rise in property pricing is currently outpacing the growth in income for most home buyers.
Changes May Come
The economy dictates the housing market availability, mortgage interest rates, and prices of homes on the market, and all of these could quickly shift in either direction. There is no concrete way to determine how the housing market will be in any given quarter, and there are often steep fluctuations. The best way to plan for buying or selling your home is to use an expert local real estate agent to help navigate the market.
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