What buyers and sellers should consider about inflation and the housing market now.
What buyers and sellers should consider about inflation and the housing market now.

The economy has been changing rapidly since the start of the year as the easing of COVID lockdowns, the Federal Reserve raising interest rates and the Russian invasion of Ukraine rocked global markets.

Even with rapidly rising mortgage rates, real estate remains competitive, in part because homeowners and potential buyers are typically less affected in terms of currency than renters.

While the housing market remains strong, it is not immune to external economic forces, including inflation. Inflation is essentially an increase in the prices consumers pay for goods and services.

Persistently low inflation is considered normal, but inflation has risen recently, affecting everything from pump heights to home listing prices.


Important real estate market statistics

A limited number of homes for sale is adding to inflationary pressures on housing, driving prices up rapidly. This low inventory is due in part to pandemic-related construction delays and in part to the fact that many homeowners who would otherwise relocate have delayed the launch of properties during the lockdown. Recent data from RE/MAX shows that the number of available homes is about 4 to 6 million fewer than what is needed to meet demand.

While competition has cooled a bit this year, it’s still tough for buyers there. The National Association of Realtors estimates that by March 2022, the average time to market is just 17 days.

Many experts also agree that rising mortgage rates are unlikely to depress prices. While prices may be rising at a slower pace this year than last year, they are still rising, with year-over-year gains likely to be in the double digits.


Although mortgage rates this year are much higher than last year, they are still historically low. On average, interest rates historically have been closer to 8% than they are today at around 5%.

The median sale price for an existing home in the U.S. in March was $375,300, according to NAR. Assuming a 20% drop and a 4.366% interest rate — Bankrate’s March average for a 30-year fixed-rate mortgage — a property purchased at that price would pay $1,497 a month (not including taxes, insurance, or HOA fees). , according to Zillow, the below-average rent was $1,904 in March.


What to consider if you want to sell your home

If you’re looking to sell your home right now, you shouldn’t have too much trouble. The real issue could be what happens on the other side of the transaction. When you go to purchase your next place to live, you’ll be joining the scrum of eager buyers competing for a limited number of available properties — and now likely obtaining a new mortgage at a higher rate, to boot.


  • The pandemic has changed the priorities of many homebuyers, and many new remote workers have been looking for more space. Despite more people wanting to move, the number of listings hasn’t kept up, which has pushed up prices — a good thing for sellers.
  • Buyers have had to compete at increasingly higher prices, and many have even waived clauses in contracts such as inspection and valuation risk.
  • Many real estate experts believe that we are near the top of the market in terms of prices, so overall, this is a good time to sell.


  • Selling is easy, but finding another home can be difficult, especially for those looking to downsize as they may find themselves in a more competitive segment.
  • According to NAR, the sale price of existing homes has risen by 15% since last year, meaning your sale won’t make as much as you make your next purchase.
  • Low inventory, high prices and high rents can make it difficult to find your next home.

What to pay attention to when buying a house

Even in this crazy market, if you play your cards right and make sure the numbers are right for you, you can still find a great home. It’s especially important to pre-approve your mortgage before you go home and make the highest possible down payment to show the seller that you’re serious and that you’re in good financial shape.


  • Despite high home prices, many experts say the current housing cycle should not repeat the mistakes of 2008, when the bubble burst and triggered the Great Depression. If you buy now, you may see some short-term losses if you try to sell the property back too soon, but there shouldn’t be a huge wave of foreclosures like it did more than a decade ago.


  • Mortgage rates are rising, making borrowing more expensive. If you plan to buy a home in the future, you may not be able to stay on the sidelines any longer.
  • A heated seller’s market means buyers must be prepared to engage in bidding wars and lose multiple properties before finalizing the deal.
  • You may need to re-evaluate your budget or must-have list: Many homes are still oversold these days, so your funds may not meet your expectations.
  • Once the market cools, you may see the value of your property drop after the close, but experts say there is no sign of a foreclosure trend and if you’re buying a permanent home, values ​​should eventually recover.

Should you wait for inflation to fall and inventories to rise?

There is no perfect time to buy a home, so it really depends on your comfort level. If those numbers work for you now, and you can get a mortgage with monthly payments that you can afford in the future, now is a good time to get the best deal.

Otherwise, it may be worth waiting until market conditions are more favorable for buyers, or to see if you can adjust the geographic or physical parameters of your condo search.

Whatever you decide, it’s important to keep your finances in order so you’re in the best position when you decide to join the home buying struggle. If you wait, you can use this time to continue contributing to your savings. After all, your down payment money can go further in cooler housing markets.

Learn more: