What’s the State of California’s Housing Market in 2022?

home for sale

Over the past couple of years, real estate prices have risen considerably. Californians are by no means exempt from this. The question is, what will California mortgage and real estate trends look like in the year to come? In a new blog post, the real estate experts at Loan Fleet dive into some of the data, and consider what California’s real estate market has in store for 2022. Learn more about why real estate prices may  continue rising in 2022, and why current mortgage rates in California make this a great time for homeowners to think about refinancing. Get all of this and more in the latest post from Loan Fleet.

The State of California’s Housing Market in 2022

Is 2022 a Good Year to Buy or Refinance?

All across the country, real estate prices have been on the rise. In fact, the past few months have seen historic surges in home prices, a trend that’s certainly impacted people in the State of California.

What exactly has caused this major uptick in real estate prices? Experts say there are a number of contributing factors. One is simply the reality that mortgage rates are so low, resulting in higher housing demand. Additionally, there are factors related to COVID-19. For example, many homeowners are looking for new properties that have improved home office space, especially as remote or hybrid work styles seem like they are going to stick around. On top of all of that, there has been a mass migration from urban areas to smaller towns and suburbs; again, COVID disruptions are at least partly to blame.

No matter the reasoning, the reality is simply this: Housing prices have gone up by quite a bit in 2020 and 2021. The question is, will prices come down in 2022? Will this be a good year for California mortgage and home buying trends? Or are these sky-high real estate prices here to stay for the foreseeable future?

Looking Ahead to 2022’s California Mortgage Trends

To answer these questions, it may be helpful to take a closer look at where the real estate trends are headed.

The California Association of Realtors (CAR) recently released its own outlook on the state’s housing market for the year to come  CAR predicts fewer sales and a price rise of roughly 5.2 percent in 2022. More precisely, CAR foresees that existing single-family home sales will drop to around 416,800 units, down from the 439,800 sales figure that’s been predicted for 2021. Meanwhile, California’s median home price is forecast to hit $834,400 in 2022, representing an increase of just over five percent. This rise follows a projected 20.3 percent increase to $793,100 in 2021. In 2020, the median home price in California was $659,400.

With all of that said, there is some reason to be skeptical about some of this data, particularly the low home sales numbers. For example, CAR’s report notes that the job growth rate will be solid at 5.2 percent, and that non-farm job growth will be up by a little more than 4.5 percent in the year to come. Combine the great job numbers with continued low California mortgage rates and it’s difficult to see real estate sales declining at such a high rate.

California Mortgage & Real Estate Trends: Our Predictions

According to CAR’s data, it is possible that California homebuyers continue to see home prices to increase and given the current the rate still be considerably low. There are signs of price increase slowing down, but the fact is that California real estate is going to remain in very high demand, especially as rent prices increase and homeownership looks more and more like the better value.

The silver lining in all of this is that mortgage rates in California remain quite low. As such, if you’re currently a homeowner and you’re paying a high rate, now might be an ideal time to refinance, securing a more reasonable rate that allows you to either lower your monthly payments or pay off your mortgage in a timelier fashion.

Learn More About Mortgage Rates in California

Refinancing may be a prudent option for homeowners looking to take advantage of low California mortgage rates. If you’d like to discuss your mortgage refinancing options, or if you have more general questions about real estate trends in California, we invite you to contact our team of experts here at Loan Fleet. Reach out whenever you’d like to learn more about California mortgage options.