Market News 12-3-21
Today’s Market News:
Housing Market Looks Promising in 2022
Will the red-hot housing market cool in the coming year? Probably not, according to National Association of Realtors Chief Economist Lawrence Yun. Yun shared four reasons why he thinks another solid year lies ahead for real estate:1
- No housing crash in the coming months
Some have speculated that astronomical home price growth has set us up for a drop similar to 2008-2009. But ongoing low mortgage rates, high demand, and regulations around subprime lending should keep that from happening.
- Manageable mortgage rate hikes
While mortgage rates will come off record-low levels, the hikes won’t be large enough to put buyers off. Yun estimated mortgage rates to rise to 3.7% in the coming year.
- Help for first-time buyers
The proposed legislation would assist first-time homebuyers with down payments and potentially provide additional funds for minority and low-income buyers.
- More inventory available
Mortgage forbearance options established by the CARES Act are expiring. People behind on mortgages can sell their homes instead of entering foreclosure, opening more inventory for buyers.
Sellers Won’t Wait for Spring
Speaking of more inventory, look for an increase in listed properties starting this winter. A survey of prospective sellers showed they’re ready to take advantage of the current market now instead of waiting until spring. Why the rush? Sellers are hoping to capitalize on soaring prices and bidding wars while avoiding contingencies.2
Technology Makes Homeownership Possible for More People
Sure, technology makes the process of home buying easier — but it can also make it easier for marginalized people to become homeowners. Fannie Mae is addressing systemic racial and socioeconomic inequity by utilizing tech to get more people into their first homes.
For example, new analytic software gives lenders the potential to dive deeper into rent history when assessing loan eligibility. Fannie Mae is also using tech to streamline the mortgage lending process and facilitate consumer education programs.3
Fall Slowdown is Good News for Buyers
The housing market cooled a bit this fall, signaling a return to normal cycles. That’s positive news for homebuyers who may not have to deal with as much competition for potential purchases. Indicators of the slowdown included:
- Decreasing list prices
- Longer times on the market
- Additional price cuts before a sale
- Slowing growth of rents
While home values across the country remained steady, month-over-month home value growth slowed significantly in 42 of the 50 largest U.S. markets.4
MLS Rule Changes Coming in January
The National Association of Realtors® (NAR) Advisor Board has approved several MLS changes effective January 1, 2022. Here’s a look at what’s new:5
- Using the word “free” when advertising on local marketplaces
New language stipulates that local marketplace participants can no longer represent brokerage services as free. This clarification makes the rule easier to follow and enforce.
- Disclosure of compensation to buyer agents
The new rule clearly defines what Realtors® must tell their clients about how they are compensated for their services.
- Showing all relevant properties to clients
New wording reiterates that Realtors® must inform clients about all properties meeting their criteria — not just those that offer higher compensation to buyer agents.