April 2021 was one of the most fiercely competitive months for real estate in history, in no small part due to the pandemic frenzy. But spring is always one of the more active seasons in the real estate market, being right after the holidays. And this year is not going to be an exception.
What sparked so many bidding wars last year is high demand and low inventory, and neither of those things has changed. Inventory is still 43% below pre-pandemic levels, and there are still plenty of Millennials, as well as some Gen Z, aging into first-time homeownership. Where there is some difference is the current state of interest rates, but it’s still going to result in the same type of market. Last year, interest rates were staying low, so buyers knew it was a good time to buy. Now, interest rates are expected to increase throughout 2022. In the long term, this will reduce demand, but as long as the increases are expected and not already here, demand will go up as buyers want to take advantage of the rates before they increase.