Last Updated on February 25, 2022 by Maggie Sutton
Homes for Heroes has prepared our market trends for March 2022. We’ve put together our predictions for this March, based on recent research, trends, and industry experts.
Market Trend #1 Inflation
Inflation is currently a hot topic, and at it’s highest point since the 1980’s. Inflation is the decline of purchasing power of a given currency over time. The rise in the general level of prices, often expressed as a percentage, means that a unit of currency effectively buys less than it did in prior periods.
That means the buying power of $1.00 covers less than it did before. Those with tangible assets, like property, may like to see some inflation, as that raises the value of their assets.
Currently, that is what is happening with the housing market. The value of a house keeps rising by simply existing. Because inflation is high, it takes more dollars to make up the cost of a house than it did before inflation started to rise. If you currently own a home, this is good news for you. You’ve probably seen the value of your home rise in the last year or two. That equity can give you tremendous purchasing power should you choose to sell your home.
If you’re looking to buy a home now or in the near future, inflation can be good for you as well. In a recent statement, Forbes said “Homeowners are shielded from mounting rental prices because their cost is fixed, regardless of what’s happening in the market. They’re locking in that payment at today’s cost.” Tangible assets like real estate get more valuable over time, which makes buying a home a good way to spend your money during inflationary times.
We can’t predict the future, so we don’t know where inflation is heading. What we do know is that if you’re aiming for homeownership one day, then your finances will be much better off if you are able to buy a house now or in the near future, to do so. Otherwise, it will continue to cost more and more each year between inflation and home prices, and with year over year increases in rent. This is a key point to understand if you’re on the fence about continuing to rent or buying a home.
March Market Trend #2 Mortgage Rates
Another March market trend is that mortgage rates are going to start ticking up. In fact, they’re close to where they were in March 2020, right before the pandemic.
Freddie Mac, one of the largest loan holders, has said that even though rates are rising, they expect to see purchases continue to go up, while refinancing goes down. This makes sense, as most people refinanced their mortgages in the last 3-9 months when rates were low with no end in sight. Now, the Federal Reserve has stated they plan to raise rates in 2022. Raising the interest rates does a few things. For one, it combats raising inflation by making consumers think twice about borrowing, therefore putting less money into the economy. It also helps the real estate market in the same way, by making potential homeowners think a little harder about making a large purchase like a house.
But, just because rates are rising doesn’t mean rates are bad. At the current average of 3.55% for a 30 year fixed mortgage, this is still significantly lower than the average 15 years ago, and even more as you go back in history. So, even though rates are raising, they are still at an excellent rate to purchase a home. Even if you did miss out on refinancing over the last few months, depending on when you purchased your home and what the rate was then, it still might save you thousands if you were to refinance today.
March Market Trend #3 Housing Supply
In January, the inventory of available existing homes hit it’s lowest point since records were kept. Then, there were only 2 months worth of homes available to purchase. That number has been ticking up, however slowly, since then. Currently, we have about a 2.5 – 3 month supply of homes. To put that into perspective, since 2019, the highest supply month was 4.6 months, and that was in May of 2020.
While that seems low, the good news is that more and more homes are coming on the market. The more inventory there is, the less pressure there is on buyers. Lawrence Yun, Chief Economist at the National Association of Realtors, thinks that part of the problem – new construction homes that have been lagging in recent years – will start to normalize this spring. If so, that will add even more necessary inventory to the market.
“With more housing inventory to hit the market, the intense multiple offers will start to ease,” Yun said. “Home prices will continue to rise but at a slower pace.”
Get Started with Homes for Heroes
If you’re ready to buy or sell your house, let us connect you with a Homes for Heroes real estate specialist. Even if you’re not sure right now is the time, you can start discussions with our knowledgeable affiliates. Homes for Heroes real estate agents and mortgage specialists are local in your area, in all 50 states. They know how to read the real estate market you’re looking to buy or sell in, and can give you expert advice.
Download our Buying Guide or Selling Guide for insight on buying or sell your home this winter.
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