What is predicted for the 2022 Real Estate Market?
The housing market was a wild ride this year. Here’s what to expect in 2022 based on predictions from experts. Home sales are on track to reach the highest level in 15 years, with an estimated 6 million homes sold in 2021. In 2022 the National Association of Realtors predict the red-hot housing market not to cool off but changes are happening.
There will be no housing market “crash” some have speculated with the astronomical home price growth. That will not be happening with ongoing low mortgage rates, housing market demands, and raising home inventory.
More homes are projected to be on the on the market in the beginning of 2022. Between April 2020 and April 2021, the number of homes listed on realtor.com fell 53% but since May 2021 inventory has climbed 23% and with the mortgage forbearance program set to expire at the end of September, housing inventory could rise another 30% this year.
As Fortune has previously reported, we’re in the middle of the five-year period during which the largest chunk of millennials, those born between 1989 and 1993, are hitting their thirties, the age when first-time homebuying really kicks into gear. The housing market, which is also benefiting from recession-induced rates simply doesn’t have enough homes available to meet that demand. We knew this wave was coming, however; in the decade following the 2008 housing crisis, homebuilding was too conservative. That’s why the nation is now under-built by around 4 million homes.
While prices are unlikely to come down, again up 30% since they bottomed out at a 40-year low this spring. That has translated into a substantial decrease in the number of homes seeing multiple bids (a.k.a. bidding wars). If it continues, it would likely increase how long homes sit on the market. That’s not price relief, but it would at least give shoppers more time to make what will likely be the biggest financial decision of their life.
At one point in the summer of 2021 home prices appreciated 17% year-over-year. Experts say there will be no price correction coming, despite the market cooling off home prices aren’t going to fall. And while prices won’t skyrocket 17% like they did over the past year but they predict a 3.2% home appreciation is expected over the next 12 months. The NAR survey participants said they expect the housing market and broader economy to normalize next year as the Fed tries to tame inflation.
Mortgage rates are historically low, for now the average is about 2.87% currently. But with the economy improving and inflation rising, the fed will likely begin to raise rates. Freddie Mac predicts rates will climb to 3.7% and 5.3% by the end of 2022
Sellers Won't Wait for Spring
You shoud look for an increase in listed properties starting this winter. A survey of prospective sellers showed they're ready to take advantage of the current market now instead of waiting until spring. Why the rush? Sellers are hoping to capitalize on soaring prices and bidding wars while avoiding contingencies.
But many hopeful homebuyers are saying they will be back in the spring, armed with the knowledge they gained from a frustrated search this past year, according to a recent survey from Realtor.com
Rivard, Aul and Associates Real Estate Team is ready for the New Year and the exciting 2022 Real Estate Market. We have over combined of 25 years of experience with strong core values and business relationships built on integrity and trust. We would love to sit down and chat on what your 2022 home goals are. Rivardaulre@gmail.com or call us at 586-786-8949