What a year 2021 turned out to be! And now our focus turns to 2022 and what changes we’ll see in the Phoenix real estate market. Predictions are always difficult but identifying the underlying driving factors is a good place to start. Let’s review what happened in 2021 in the Phoenix real estate market and a 2022 market forecast.
What will affect the housing market in 2022?
The dominant theme that is driving appreciation is the lack of inventory or homes for sale. Builders of new homes are trying to fill the gap with new construction. Information in the video below will show this trend. What is appearing will be a non-factor are the effects of the winding down of the foreclosure moratorium. Initially, there were many homeowners in forbearance and seriously delinquent loans were also at elevated levels.
Both of these metrics; homeowners in forbearance and seriously delinquent loans have been trending favorably downward with time. The effects of the foreclosure moratorium and exiting of homeowner in forbearance will not be completely understood until the second half of 2022. It’s also becoming clear that there will not be a wave of foreclosures. For more details, watch the video above.
Another factor that will come into play in the 2022 real estate market are mortgage interest rates. Buyers have been beneficiary of low rates for quite a while. I remember when a mortgage interest rate of 6% was considered reasonable. Now buyers are surprised if it is above 3%. Low interest rates have helped buyers cope with higher prices allowing monthly payments to remain low. Higher rates may be something that dampens the enthusiasm and purchasing power of buyers going forward. To understand how all these factors are affecting the 2022 market forecast in real time, please reach out to me at 480-326-8571.
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