The U.S. housing market saw a record-breaking year in 2021, and 2022 will likely look very similar.
Homes prices soared across the country as sellers tried to cash in on the demand from potential buyers.
Tenants also saw their rent increase due to inflation.
Experts say those trends are expected to continue in 2022.
Finding the perfect home to purchase can be stressful, but couple that with a booming housing market and the search intensifies even more.
"We wanted to get a house badly and there were some tough points trying to find it," said Chad Sankow, a recent home buyer in Connecticut.
He and his wife, Charisse, finally found a home they loved after six months of searching. The couple said it was a nerve-racking process at times.
"Homes we were looking at sold for almost half the price the last time they sold," Charisse said. "We were worried that if the prices were going to keep rising, if we waited any longer, would we be able to afford in the future?”
According to online real estate marketplace Zillow, 2021 was one of the hottest markets in U.S. history.
"We did feel kind of a sense of urgency or else maybe we wouldn't be able to secure a home that fit our needs," Charisse said.
Experts say while 2022 won't be quite as hot as 2021, house prices will continue their upward trend, but more so due to supply constraints.
"We still have supply chain, inflationary type costs pushing new construction pricing up,” said Kevin Riordan, a real estate expert and clinical specialist of accounting and finance with Montclair State University.
Zillow's economic research team predicts an 11% home value growth in 2022.
Riordan said the demand for housing plus inflation also led to higher rental costs in 2021. He said that could continue in the new year as well.
"As housing prices increase, people's ability to buy that house diminishes because you need certain income levels and down payment requirements so that forces a cohort of people back into the rental market," Riordan said.
So, when will prices start dropping again? That depends on supply.
"If there's more supply, there could be more downward pressure on pricing that way," Riordan said.
That's especially true in the rental market.
"We need some type of supply jolt, through some kind of public-private partnership, affordability solutions," Riordan said.
If you're looking to buy, it still may be tough.
"You can use some affordable mortgage vehicles like FHA and so forth, which have low down payment requirements. Then, the issue will become the housing price itself. Can you find that right entry point?" Riordan said.
However, pay close attention to listings in your area and the time of year.
"There are less homes available during this time period, say October through February," Riordan said.
If you're putting your search on pause, Riordan suggests looking at multifamily homes as another option to consider.
"Then you can live in the house possibly and rent part of it also, so it helps subsidize the cost that's required for you to own it," he said.
Whichever route you decide, Chad and Charisse are encouraging those interested in buying to partner with a real estate agent who's familiar with the area.
They're also reminding prospective buyers not to give up.
"If that one doesn't work out, it wasn't meant to be but your home, but we'll find one," Charisse said.
