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The end of 2021 saw a boom in the US housing market and the trends seem positive for sellers for most of 2022. As we enter a new year, what are the trends to look out for? We had a closer look.

Mortgage Rates Will Rise

There is no doubt that record-low mortgage rates fueled the housing frenzy of 2020 and 2021. Some believe that this was the most important factor in the housing boom. But prices are rising. The Mortgage Bankers Association expects average interest rates on 30-year loans to reach 4% by the end of 2022. That is not such good news for the 68 million Americans who have poor credit. For these people, a private money lender might be their only option.

Housing Affordability Will not Improve

The National Home Builders Association estimates that the average price of all new and existing homes sold in the U.S. rose from $320,000 in the third quarter of 2020 to $355,000 in the summer of 2021. Soaring prices are making it harder for Americans to afford a home. Only 56.6% of homes sold in the third quarter were affordable for a typical income-earning family.

Price Appreciation is Slowing

After an intense surge, house prices finally seem to be calming down. The median price of homes sold by real estate agents rose from $280,700 in March 2020 at the start of the pandemic to $362,800 in June 2021, a 29% increase. Since then, however, prices have stayed in the $350,000 range. This is a bit of good news for buyers, but it is still not easy for many to get a loan. The private money lender will once again be the best option they have if they want a home.

Hispanic Home Buying Will Gain Momentum

According to a survey by the Urban Institute, Hispanics are projected to be the largest group of buyers in the coming years. This nonprofit organization predicts that by 2040, nearly 70% of new homeowners in the US will be Hispanic. Although rising home prices create challenges for first-time buyers, the demographic wave is still coming.

Housing trends for sellers are good, but less so for the average joe. The slowing appreciation is a positive, but many Americans will have to knock on the door of the private money lender for their dream house.