2022 Housing Market Insights

"A Perfect Storm." According to Fortune, "That's the best way to describe the red-hot housing market we've seen from coast to coast during the pandemic. It was spurred by a combination of recession-induced low mortgage rates, remote work allowing buyers to sprawl further away from their workplace, and a demographic wave of first-time millennial homebuyers entering the market. Of course, years of under-building means there simply aren't enough homes available to meet this demand. Cue record price growth." Fortune

 

So where are we headed?

 

"Home price appreciation of 19.9%—a 12-month record set between Aug. 2020 and Aug. 2021—can't be sustained forever."

 

Already, there are signs the housing boom is losing some steam. We're seeing seasonality—a cooling period that happens like clockwork most years—return to the market after it was absent during the holiday and vacation stretch last year. That's not all: More homebuyers are finally beginning to push back against surging prices. Indeed, in October 60.3% of sales involved a bidding war, which is down from the all-time high in April (74.5%). There's also the increased likelihood the Federal Reserve will raise rates to tamp down inflation. Rising mortgage rates would price out some buyers altogether. 

 

What does this mean for home price growth in 2022? To find out, Fortune reviewed seven industry forecast models."

 

 

"Zillow’s forecast calls for 11% home value growth in 2022. That’s down from a projected 19.5% in 2021, a record year-end pace of home value appreciation, but would rank among the strongest years Zillow has tracked. Existing home sales are predicted to total 6.35 million, compared to an estimated 6.12 million this year. That would be the highest number of home sales in any year since 2006."

 

 

"The market is likely to cool compared to 2021, but it will still be active... It may still be a seller’s market in many areas, but there’s likely to be more opportunities and wiggle room for homebuyers. A ‘priced out’ buyer should be able to find many more options. Experts also reinforce that 2022’s housing market is not at all likely to crash — the conditions we’re seeing are nothing like those that led up to the crisis of 2008.”

 

 

"Nationwide, rent growth went from minimal to double-digit pace in 2021 as the U.S. made substantial progress against the pandemic. With the rental vacancy rate continuing near its historic lows during the pandemic, in which just 5.7% to 6.8% of rental housing units are vacant at any point in time compared to 7% or more, historically, renters are also contending with limited supply and excess demand that leads to upward pressure on rents. In 2022, we expect this trend will continue and fuel rent growth. At a national level, we forecast rent growth of 7.1% in the next 12 months, somewhat ahead of home price growth as rents continue to rebound from slower growth earlier in the pandemic."

 

 

With the ever-increasing number of automated value and estimate resources, we know how overwhelming and difficult it can be to find ACCURATE information you can trust!

 

We would love to provide you with a real-time snapshot of your home's value in today's market - based on the most recent market data available, and a side-by-side evaluation and comparison of homes that have recently sold in the same neighborhood, area, and price range. 

 

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