2021 was a great year for Weichert franchised brokerages. The combination of historically low mortgage interest rates and low housing inventory drove competition in real estate markets around the country. As the year comes to a close, we’re taking a look at what industry experts have to say about prevailing market forces and ongoing real estate trends that will shape the real estate industry in 2022.
It’s likely that the real estate market will remain strong in 2022. In recent years, the industry has proven to be resilient despite significant, unexpected challenges. Agents and brokers will always play a key role in shaping how buyers and sellers adapt to new trends in the market.
Here are three real estate trends to keep in mind as you plan for success in 2022!
Mortgage rates will increase
It’s likely that The Fed will raise mortgage interest rates in response to rising inflation, but the rates will still be comparatively low. The Mortgage Bankers Association predicts that the 30-year fixed mortgage rate will increase to 4% by the end of 2022.
While current inflation may contribute to a rise in interest rates, it’s also a key factor that impacts wages and real estate prices. Home prices are expected to stay on an upward trajectory. Even if buyers are not incentivized to act as quickly as they have in recent years, supply and demand issues will continue to fuel competition in the real estate market.
“Low mortgage rates, rising employment, and growing millennial demand will keep the housing market strong. Keep in mind that about 4.6 million millennials will reach the age that millennials typically get married in 2022,” said Nadia Evangelou, Senior Economist & Director of Forecasting, National Association of Realtors.
The Takeaway: Historically low mortgage interest rates and unprecedented changes in the economy led to an unexpected boom. Mortgage rates will increase, home prices will rise, and millennials will drive demand.
Low inventory and high demand will continue— with less intensity
From bidding wars to sky high home values, 2021 was a peak year for sellers. In 2022, the strong seller’s market will persist, but the effects of supply chain disruptions and inflation will cool things down. The likelihood of higher interest rates will impact the pace of new home construction, home repairs, and upgrades.
Costly delays have been driving up the price of construction materials and lumber. Worker shortages have added to the challenges across industries. Until the supply chain issues stabilize, the ripple effect will continue to delay home builders, which stalls buyers and sellers.
The demand for new homes, secondary markets, and “trade ups” will remain high, but low inventory will persist until industries that serve the flow of real estate markets are able to recover.
The Takeaway: Supply chain issues will persist in 2022, but when they stabilize, buyers will be ready. Building relationships and maintaining connections with potential buyers will pay off in the future.
Millennial buyers expect tech
Millennials entering the real estate market as first-time home buyers are one of the fastest growing buyer segments according to a 2021 report from the National Association of Realtors. From mobile apps to digital marketing, millennials naturally embrace tech.
The next wave of first-time home buyers will expect to do business across multiple channels. As a result, real estate industry professionals will be using tech tools more than ever and integrating more self-service technology options as the number of millennial buyers increase.
Millennials are known to expect digital communication by default, yet they’re equally comfortable interacting face to face. Some of the most convenient and versatile technologies in real estate like eSignature, social media, and video tours will become even more commonplace. As a result, more real estate brokerages will invest in tech solutions that optimize omnichannel buying experiences.
The Takeaway: Technology integration is going to drive differentiation in 2022. With the next generation of first-time buyers, brokers will clearly see the benefits of technology and the data that it provides.
The Weichert Way
No matter what’s around the corner, it’s critical that you have the resources, tools and support you need to build relationships and deliver stellar customer experiences to your clients. If you are struggling to find the right resources for your brokerage, Weichert can help. myWeichert powered by kvCORE offers a complete tech stack, including personalized websites, smart CRM, automated marketing and lead gen tools and is included as part of affiliation. This is complemented by our extensive marketing suite of materials, training and support. By leveraging the full capabilities of Weichert, you and your agents will be well-positioned to meet today’s trends and beyond. Here’s wishing you and your team the best in 2022. Ready to learn more about how Weichert can support you? Start with resources and support.