After an unforeseen growth in home prices in 2020, the real estate market in the United States continued to trend upwards at unprecedented rates in 2021. Despite a slight cooling of a red-hot market towards the end of the year, would-be home sellers still reaped the benefits of historically low mortgage rates coupled with low housing stock. Homebuyers still faced difficulties in a robust seller’s market, but there were some indications that things might be turning around a bit.
While it’s difficult to make an accurate prediction of the real estate market, economic and housing experts agree there are a number of factors that could give buyers and sellers an idea of what the market might look like. Rising interest rates, supply chain issues, and easing of inflation could bring the real estate market back to reality in some ways.
What to expect from the real estate market
Growth in home prices could continue to climb at a slower rate
Similarly, the Northbrook real estate market saw home values increase by 8.5% over the same period from 2020 to 2021, and some areas of Illinois experienced almost a 10% growth from a year before. Some real estate experts seem to think that home prices in the Chicago area will continue to increase along with the rest of the country.
Rising interest rates could mean higher mortgage rates
In January 2022, mortgage rates reached their highest level since the start of the pandemic in March 2020. Experts suggest you shop around to find a better-than-average mortgage rate. Higher mortgage rates could affect the real estate market in ways we haven’t seen in years, but it doesn’t mean that you shouldn’t see what the market has to offer.
Low housing stock could remain an issue
So what can we expect the market to look like based on supply chain issues? It’s hard to tell. Supply chain issues will still present challenges at all levels associated with the housing market, but it is doubtful that we will see the kind of volatility we saw in 2021.
Inflation could play an important role in the real estate market
Home values typically keep in line with the rate of inflation, meaning a home’s value could rise with inflation. For current homeowners, this means you could consider selling your home at or even above the asking price. For buyers and sellers across the country, including those who are interested in the Northbrook real estate market, timing is critical. Prospective investors will want to weigh a variety of factors, including time and type of investment. Inflation is difficult to predict, but many economic experts expect to see some drop in inflation in the coming year.
Whether you’re looking to buy or sell a home, economic and housing experts expect rising interest rates, slower housing price appreciation, and a dip in inflation to impact the housing market. After a spectacular real estate market in 2021, particularly for home sellers, most people can expect a similar yet slower growth trend both across the country and specifically in Chicago suburbs like Lake Forest and Highland Park.