4 Reasons Not to Buy a Home in 2022
You may want to put your plans on hold for a while.
- The 2022 housing market is starting off with sluggish inventory and high prices.
- Between that and personal concerns, you may want to pause your home buying plans.
If you missed out on a chance to buy a home in 2021, you may have your eyes on 2022. But will that be a good year to buy a home? It's debatable. In fact, here are four reasons why you might specifically want to wait.
1. Home prices are likely to remain high
During the third quarter of 2021, home prices rose 18.5% from the previous year, according to the Federal Housing Finance Agency's House Price Index. While we don't have fourth quarter data available yet, it's fair to say that home prices have remained extraordinarily high.
If you attempt to buy a home in 2022, you could get stuck with a higher mortgage than you're comfortable with. And while we should be starting the new year off with relatively low mortgage rates, that may not be enough to offset higher prices.
2. Inventory could remain sluggish
The U.S. housing market is ending 2021 starved for inventory. Chances are, things won't improve much in 2022, at least not during the first half of the year.
Many sellers have held off on listing their homes due to general pandemic-related and economic concerns. If more homes don't hit the market, not only will prices stay high, but also, you'll have a limited selection to choose from. That could, in turn, leave you in a position where you have to compromise on the features you've always wanted. Or, it could leave you having to buy a home that's seen better days and sink lots of money into renovations and repairs.
3. There's a lot of uncertainty to deal with
COVID variants. Surging cases. Inflation. You name it. We're closing out 2021 in a shaky spot. Things could (and hopefully will) improve in 2022, though it may be a bad time to make a major financial commitment.
So far, there's been no indication that widespread economic shutdowns will be implemented to combat rising COVID-19 cases, as was the case during the early stages of the pandemic. But if things worsen, that could change. And that could also result in income loss, making homeownership a more difficult prospect.
4. Your job situation could change
Right now, a lot of people are working remotely due to the pandemic. In fact, many big-name companies were planning to bring employees back to the office in early 2022, but had to postpone those plans due to rising cases and the newest variant of concern.
Until things settle down on the remote work front, you may not want to commit to buying a home. If it turns out you'll be asked to report to a new location once workers start coming back into the office, that could put you in a position where you've signed up for a horrendous commute and are stuck with it.
If you're in a strong financial position to buy a home – say, you've saved a sizable down payment and are secure in your job – then you may want to move forward with plans to purchase one in 2022. But if you have your doubts, waiting to buy could also work to your benefit.
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