Buy? Sell? Rent? or Stay? in the 2022 Housing Market
The current 2022 housing market has a lot of people thinking about their future. If you are wondering what your next best move is, this article may help you answer some big questions.
What is happening in the housing market in Spring and Summer months of 2022?
There are a combination of factors that make the 2022 housing market unique in the second half of the year.
- In areas with job growth, like many cities in Texas, the demand for housing is high. This is creating competition in the market and many homes are selling quickly at price points over asking price.
- Remaining supply chain delays from the effects of the pandemic and higher material costs have slowed the building of new homes in some areas.
- The Fed, or Federal Reserve, has scheduled and followed through on raising the “over night interest rate” for banks. This impacts the potential rate of return to mortgage investors and has impacted the interest rates available to consumers on their mortgages. While the Fed intends to continue to incrementally raise the over night rate to combat long-term inflation, interest rates for consumers have the potential to stabilize. (Interest rates are likely to drop again in the future as the rate of inflation slows, which will allow home owners an opportunity to refinance their mortgages to lower interest rates.)
- Overall, Texas has some of the most affordable housing costs in comparison to other major metropolitan areas in the U.S.. Making Austin, Houston, and the Dallas – Ft. Worth metroplex popular magnets for professional job seekers looking to leave states with a higher cost-of-living.
Is the 2022 housing market the right time to buy a home?
It is still a good time to buy a home in Texas. We have seen record growth in home prices in the last two years and although the rate of price increases may begin to slow this year, they are not likely to drop anytime soon. There are significantly more potential home buyers in Texas, than there are homes available. This means that the demand for homes is likely to remain strong for quite some time.
Buying a home now means that your investment will continue to grow in value as both the demand and inventory of houses in Texas steadily grows. This means that buying a home in the 2022 housing market is a good investment.
If you are looking to buy a home in 2022, you will need to have a solid plan in place. In a competitive housing market you need to be financially prepared and ready to make decisions confidently.
Is it a good time to sell my home?
The 2022 housing market is hot. Inventory of available homes is low and demand is high, making 2022 a potentially great time to sell your home. It is a “seller’s market,” most homes in Texas are selling quickly, and for over asking price. This could be an excellent time to take advantage of the recent growth in the housing market to sell your home at a profit.
However, if you plan to sell your home, you should also have a plan for your next living space. Having a solid plan for where to land is a good idea in this market. The competition is high. Even though you may want to buy a home, there are likely to be a number of competitive offers submitted on the same home(s) you have your eye on. The potential to sell your home at a higher price is likely in the 2022 housing market, but you will find that buying another home is going to be competitively priced too.
Should I rent in the 2022 housing market?
The average price increase for Texans who residential rent property within the last year was $200 per month. According to the Rent Price Report from Rent.com: From March 2021 to March 2022 rent prices have increased by 16.48% for two bedroom properties in the State of Texas as a whole. However, urban areas with more job growth have seen higher percentages of residential rent price increases.
Texas Cities with the Highest Year over Year (Two Bedroom) Rent Increase as of March 2022:
- Frisco | 21.69% increase to an average price of $2,762.00 per month
- Plano | 33.92% increase to an average price of $2,594.00 per month
- Dallas | 32.64% increase to an average price of $2,475.00 per month
- Austin | 43.39% increase to an average price of $2,197.00 per month
- McKinney | 24.69% increase to an average price of $2,166.00 per month
- Irving | 20.61% increase to an average price of $2,076.00 per month
- Houston | 19.63% increase to an average price of $1,961.00 per month
- Garland | 11.79% increase to an average price of $1,660.00 per month
- Ft. Worth | 12.95% increase to an average price of $1,630.00 per month
- Arlington | 14.27% increase to an average price of $1,377.00 per month
- San Antonio | 12.84% increase to an average price of $1,354.00 per month
- El Paso | 15.49% increase to an average price of $1,293.00 per month
Texas Cities with the Highest Year over Year (One Bedroom) Rent Increase as of March 2022:
- Austin | 46.75% increase to an average price of $1,933.00 per month
- Plano | 17.46% increase to an average price of $1,876.00 per month
- Frisco | 16.86% increase to an average price of $1,862.00 per month
- Dallas | 19.85% increase to an average price of $1,667.00 per month
- Irving | 23.33% increase to an average price of $1,653.00 per month
- McKinney | 24.01% increase to an average price of $1,557.00 per month
- Houston | 15.20% increase to an average price of $1,397.00 per month
- San Antonio | 24.15% increase to an average price of $1,174.00 per month
- Arlington | 16.35% increase to an average price of $1,146.00 per month
- Amarillo | 51.78% increase to an average price of $1,025.00 per month
When considering whether you should continue renting or if you should buy a home there are a number of factors involved. In the 2022 housing market the decision to buy deserves a holistic look at the needs of you and your family, as well as the potential investment. Financially, the fast increasing rent prices can be a good reason to consider buying a home.
While home prices are also continuing to rise, when you own the property the value becomes an asset to you as it rises. In many Texas cites the monthly mortgage payment of a 3 bedroom / 2 bathroom home is often less than the cost of rent for a 2 bedroom apartment.
If you are financially ready to buy a home the 2022 housing market is still a good time to buy.
Renting can be a good strategy if you are planning to move in less than 5 years, or you would like to continue to save while waiting for the market to stabilize.
If I stay in my home, what should I expect in the 2022 housing market?
If you already own a home, then your home’s fair market value is predicted to increase more steadily in the the remaining months of 2022 than we have seen in recent years past. In 2020 and 2021 home values in Texas and across the U.S. rose at a record setting pace.
These increases were largely due to the competition for buying residential property in combination with historically low interest rates for mortgages. The competition drove the purchase price points of many home far above their asking prices. When your home is appraised for its market value it is compared to similar homes that have recently sold in your neighborhood.
Market analysts are predicting a “leveling” in the price of homes sold this Spring and Summer. However, if you have owned your home for a few years, the market has most likely added some equity to your home recently. You don’t have to sell your home to benefit from the market growth. Access your equity with a cash out refinance to pay off debt, renovate your home, or make other investments.
Increasing home values, also means potentially increasing property taxes for Texas homeowners. In a recent article we shared some information on how you can protest the proposed tax evaluation this spring with your local tax appraisal district.
Staying in your home can also provide you some stability in a competitive and relatively unpredictable market. If you have a fixed rate mortgage, the principal and interest portion of your monthly payments doesn’t change for the term of your loan. This means that you can avoid the rising costs of renting. While you stay in your home the market will continue to build equity for you, as long as you maintain the condition of your home.
We are here to help answer your mortgage questions, whenever you have them. Whether you are looking to buy, sell, or stay in your home, we want to be the mortgage experts on your team.
Reach out to us to get a customized quote on your best mortgage options!