Some issues such as demand exceeding supply and affordability challenges will likely continue yet inventory cchallenges may soften in 2022.
Realtor.com Forecasting Report Indicates 2022 Housing Market to Be “Mixed Bag”
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Here are some key points highlighted from Realtor.com’s just released 2022 forecasting report for the 2022 real estate market:
- Housing market to remain “very competitive” for homebuyers
- Inventory shortages expected to decline BUT
- Demand from first-time buyers and Millennials likely to exceed “inventory recovery”
- +6.6% y/y uptick in existing home sales
- US median sales price appreciation pegged at 2.9% y/y for existing homes
- Mortgage rates to reach average of 3.3% through entire year but peaking at 3.6% by end of 2022
- Rents expected to jump +7.1% y/y
Key Takeaways from Realtor.com Forecasting Report for 2022
Realtor.com’s report stated that homebuyers will find more opportunities to buy homes but that “…affordability will be a growing consideration.”
Elaborating on this issue of affordability, the report stated, “With listing prices, rents and mortgage rates all expected to climb while incomes rise (but not comparably), 2022 will present a mixed bag of housing affordability challenges and opportunities.”
Danielle Hale, Realtor.com’s Chief Economist, predicts that 2022 will be “a whirlwind year of homebuying.” In the report, Hale wrote, “Affordability will increasingly be a challenge as interest rates and prices rise, but remote work may expand search areas and enable younger buyers to find their first homes sooner than they might have otherwise. And with more than 45M Millennials within the prime first-time buying ages of 26-35 heading into 2022, we expect the market to remain competitive.”
Realtor.com’s forecasting report also points to “…populations like Hispanic Americans (playing) a growing role in the 2022 housing market…” and that, due to continuing pandemic concerns, buyers will continue to want more space.
Home Price Predictions
Realtor.com predicts that these metro areas will have the greatest home price growth:
- Portland Maine – +10% y/y
- Providence Rhode Island – +9.5%
- Salt Lake City Utah – +8.5%
Thanks to Realtor.com and Inman.