If you’re looking for some relief in the crowded and competitive housing market in 2022, these 2022 real estate trends may lend some hope.
“With more housing inventory to hit the market, the intense multiple offers will start to ease,” according to Lawrence Yun, the National Association of Realtor’s chief economist. “Home prices will continue to rise but at a slower pace.”
1. Mortgage Rates Will Continue Rising
Mortgages rates are predicted to rise to 3.6% by the end of 2022. What does this mean for home-buyers? Assuming rates rise from 3% to 3.6%, a $300,000 loan will cost buyers an extra $100 per month.
2. Buyer Demand, Competition Will Decline
Redfin’s chief economist, Daryl Fairweather, sees a shift toward a less frothy market. “2022 will bring more balance to the housing market,” she says. “But don’t expect a buyer’s market; just more selection, less frenzy, and slower price growth.”
3. Home Value Appreciation Will Slow
A NAR survey of more than 20 economic and housing experts predicted that annual median home prices would increase by 5.7%, far less than the previous year. NAR chief economist Lawrence Yun, “Slowing price growth will partly be the consequence of interest rate hikes by the Federal Reserve.”
4. New Home Construction Will Increase
Mike Fratantoni, the chief economist at the Mortgage Bankers Association, sees the supply shortage starting to ease in 2022, leading to additional inventory hitting the market. “Home-builders will have more success overcoming current building material shortages and should be able to increase the pace of construction to meet the sizable demand for buying,” he said.
This will be an interesting 2022 real estate trend to keep a beat on. According to Random Lengths, lumber prices are now about 22% lower than peak but still about three times their average pre-pandemic price.
Danielle Hale, chief economist at Realtor.com, notes homeowners preparing to sell are in a good position going into 2022. Home values are predicted to continue their upward march, albeit at a slower pace.