EPISODE 323: Lead Generation in a Cooling Real Estate Market
Jonathan Denwood and Robert Newman discussed how the 2022 prediction of having a cooling or slowing real estate market would impact lead generation on the 323rd episode of the Mail Right Show. Robert Newman, who has over 16 years of experience in the real estate SEO industry, is the founder and CEO of InboundREM, an inbound marketing agency. On the other side, Jonathan Denwood is the founder and CEO of Mail Right, a platform that streamlines and simplifies the usage of various digital tools.
Predictions for 2022: A Slowing Real Estate Market
The housing market in 2021 was scorching, and many people eager to purchase a home were forced to put their plans on delay because skyrocketing property prices made it impossible. This year, we’re in a similar situation – without record-low mortgage rates to balance rising property values.
Based on the NAR, the median existing house sale price was $350,300 in January 2022. This is an increase of 15.4 percent over the previous year.
Now, will this trend continue as we go through 2022? According to some analysts, no, because mortgage rate hikes could scare away purchasers, while others assert that demand for housing will remain high.
At the moment, the average 30-year mortgage rate is approximately 4.5 percent. Considering that the 30-year loan never reached 4% in 2021, it’s an alarming number, mainly when home values are so high.
However, it is not simply that mortgage rates are rising. Rather than that, borrowers should anticipate rates increasing as 2022 progresses. We owe this to the Federal Reserve.
The Federal Reserve recently increased its federal funds rate and intended to do so again this year. And while the Federal Reserve does not determine mortgage rates, its activities certainly affect them. As a result, it’s reasonable to predict that consumers will pay a higher interest rate on house loans in the following months.
What does this mean exactly?
According to others, even with rising mortgage rates and higher costs, the housing market should stay robust due to extremely low inventories and growing demand as more millennials are predicted to purchase homes in 2022. According to a poll conducted by the NAR, millennials now account for the most significant share of homebuyers in the United States. According to a survey, buying is more cost-effective than renting in an increasing number of the country’s largest cities. This is good news for the millennials entering the prime homebuying age since many of them are already in their mid-thirties, reaching their peak homebuying years.
However, other experts believe it is reasonable to predict that rising mortgage rates will result in some buyer reluctance. Whether the adjustment is severe enough to generate significant declines in housing values remains to be seen. However, there is a possibility that we may see a gradual cooling of prices over the year.
Naturally, housing inventory will also play a role in determining whether home prices fall. At the moment, we are in a classic low-supply, high-demand situation, which benefits sellers. However, if more homes come on the market this year, purchasers will regain some bargaining power, resulting in more favorable housing pricing for those on the purchasing end.