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Housing in 2022.....

WILL HOUSE PRICES GO DOWN IN 2022?
There are two possible answers to this question. The first: Yes, prices are likely to go down somewhat in the short term in this current housing market. For the second answer: No, prices will not go down enough to find “bargain” prices on a home.
To explain that first answer, you have to look at the end of 2020 and the beginning of 2021, when there was a surge in home buying nationwide — homes sold in hours if not days, people were paying over asking price, bidding wars had prices going beyond appraisals, and buyers were waiving appraisals to close faster. Some people even cashed out financial accounts to make all-cash offers, which allow for faster closings (and are sellers’ favorites).
That said, buyers making home offers have calmed down somewhat since then, resulting in the second half of 2021 being a little more of a realistic housing market. Homes are taking days if not weeks to sell (albeit still incredible), and the prices are closer to what the seller is asking or slightly under. However, prices are likely to remain higher in bigger cities, where there may not be enough land to build on or builders willing to put up new houses — and that puts pressure on existing homes to meet the needs of all new buyers on the market.

WHAT SHOULD I CONSIDER WHEN BUYING A HOUSE?
There are many things to consider when buying a house, and your wants and needs are key to this. This is a decision that starts with your budget and ends with your wish list, especially if you are a first-time home buyer. Consider:
Your lifestyle: Are you on a strict budget and want to find a smaller home with a relatively smaller price? Or do you want to live a lavish, more high-end lifestyle, with luxury amenities, such as a swimming pool, extreme landscaping, more bedrooms, and a gourmet or upscale kitchen (and, in turn, a larger house note).
The neighborhood: Is it safe? Are there good schools nearby?
Your family size: Do you want kids or pets, if you don’t already have them? Will space be an issue?
The overall expenses: The negotiated sales price will likely not be the final price of the home. Think about overall expenses when buying, such as the home-inspection cost, appraisal cost, and additional closing costs. You will also want to know your credit score for buying a house.


WHY YOU SHOULDN'T SPEND YOUR MAXIMUM BUDGET BUYING A HOUSE

1. The Lender Didn’t Consider Other Expenses – Lenders determine how much you can afford based on your income and information included on your credit report. This might include car payments, credit card payments, your future home loan payment, and other debts. What they don’t take into consideration are other expenses that you might have like daycare, auto insurance, or out-of-pocket medical expenses. So, from a lender’s viewpoint it might look like you can afford a certain amount, but in reality you need to spend much less on a house to keep your personal finances healthy.
2. You Won’t Have a Cushion for Repairs – Buying a house at the top of your budget might be a dream come true, especially if you find the perfect property. However, the more that you spend on a house, the more you’ll pay monthly. And unfortunately, if you don’t give yourself any wiggle room, it might be impossible to save an emergency fund, and you might not have disposable cash available for incidentals and home repairs that will occur.
3. You’ll be Unable to Save for Retirement – The earlier that you start saving for retirement, the better. Unfortunately, many young adults spend too much on a house early on. As a result, their incomes can only afford living expenses, and they can’t afford to start preparing for their futures. They neglect joining their employer’s 401(k) or starting an IRA, and some put off retirement planning until their income increases, which can be five or ten years down the road. They end up retiring with less money and working longer than expected. On the other hand, buying less than you can afford frees up money in your budget which you can use for the future
4. You’ll be Broke or House Poor – There is nothing fun about being house poor. You might move into your dream home, but this happiness and excitement will be short-lived if you’re living paycheck to paycheck and barely making ends meet because your mortgage is too expensive. All of your money might go to the house payment, and there might be little cash for the occasional splurge or a vacation.
5. You Prefer Not Draining Your Savings Account – There are people who’ve completely drained their savings accounts buying a house. This can be dangerous. You still need a cash cushion after moving into a new house for problems that can and will take place. For example, one week after moving into a house you might need to pay hundreds to fix a leaky pipe that damaged a section of the ceiling and carpet below.
If you purchase a house under budget, that’s less money you’ll have to take from savings for a down payment and closing costs. Even if you only maintain a $1,000 cushion, this is better than nothing.
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