The housing market has been soaring recently. National housing prices have increased by 33% in the past 2 years, and we’ve seen the highest number of single-year home sales in more than a decade. So, everyone is naturally wondering how long this will last. Can this record pace last for years to come, will we find a stable plateau, or will there be an equally dramatic drop?
Forecasts can help us analyze the past and present to find the most likely future outcome. They won’t always be perfect, but they’re an essential piece to the housing market puzzle. Let’s break down the national forecast for the rest of 2022.
After a huge increase over the last year, the housing market is starting to balance out. Prices can only rise so much before buyers are priced out of the market, causing the number of sales to decrease, and we appear to be reaching that plateau, so housing prices are still expected to rise, albeit more slowly, over the next 12-24 months.
Bigger properties are taking over the market, while smaller homes are dwindling, making affordable properties scarce for lower-income buyers. There is some good news for buyers, though: Housing inventory is increasing, meaning more options and more competition to help balance out the prices. Peaks in both home prices and mortgage rates are also causing an increase in renters. Renting prices have risen with housing prices, and an increase in renters will only continue that trend.
Property market trends in Delaware largely follow what we have discussed above, but let’s look at more concrete statistics. The number of units sold this past July was down 21% from July of 2021, so either demand is shrinking, or too many buyers have been priced-out. Comparing the same months, the median sales price was up 9% from last year. This is a very telling statistic, considering the increase from June 2021 to June 2022 was 17%. This is right in line with what we are predicting nation-wide, with a continuous – but slower – increase in median property price.
Overall, we are seeing an increase in supply with a slightly smaller increase in demand, which is likely to lead to a more stable housing market in the next few years.
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