Moderate home value growth
Home values will rise in 2022 but at a slower pace. Most areas can expect about a 5% increase in the value of their home.
Interest rates will rise
We expect 2 to 3 rate hikes from the Federal Reserve throughout 2022. By the end of the year buyers and sellers should expect to see mortgage interest rates around 3.75%.
More homes for sale
Data suggests that inventory levels have bottomed out and we can expect to see more homes for sale throughout 2022 than we did in 2021 and 2020
Strong demand for suburbs
Work from home is here to stay for many. With that has come a signifigant shift in demand for the outlying suburbs 30+ miles (and further) outside of downtown areas.
Millennial home buyers are here
Millennials between the ages of 25-40 now represent the biggest age group in our population with many of them ready to hit the market and buy their 1st home.
Rents will continue to rise
Rental rates increased dramatically the past few years and we expect them to increase further. Buying a home will remain an affordable alternative for buyers who qualify.
Key Demographics to Watch
- 87% of home buyers surveyed prefer to have a Realtor represent them
- Birth rates are at 100 year lows. Only 31% of home buyers have a minor less than 18 years old living in the home
- Only 50% of home buyers are married
- Single women represent the largeat growth sector in home buyer demand
- Baby boomers are arriving at the ages where they must address their current housing situation
As we move into 2022, both buyers and sellers are wondering, what’s next? Will there be more homes available to buy? Will prices keep climbing? How high will mortgage rates go? Check out Brian’s latest video for answers to those questions and more.
Expert Insights on the 2022 Housing Market
As we move into 2022, both buyers and sellers are wondering, what’s next? Will there be more homes available to buy? Will prices keep climbing? How high will mortgage rates go? For the answer to those questions and more, we turn to the experts. Here’s a look at what they say we can expect in 2022.
Odeta Kushi, Deputy Chief Economist, First American:
“Consensus forecasts put rates at about 3.7% by the end of next year. So, that’s still historically low, but certainly higher than they are today.”
Danielle Hale, Chief Economist, realtor.com:
“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 45 million millennials within the prime first-time buying ages of 26-35 heading into 2022, we expect the market to remain competitive.”
Lawrence Yun, Chief Economist, National Association of Realtors (NAR):
“With more housing inventory to hit the market, the intense multiple offers will start to ease. Home prices will continue to rise but at a slower pace.”
George Ratiu, Manager of Economic Research, realtor.com:
“We also expect a growing number of homeowners to bring properties to market, taking some pressure off high prices and offering buyers more options.”
Mark Fleming, Chief Economist, First American:
“Strong demographic demand will continue to act as the wind in the housing market’s sails.”
What Does This Mean for Buyers?
Hope is on the horizon for 2022. You should see your options grow as more homes are listed and some of the peak intensity of buyer competition starts to ease. Just remember, rising rates and prices are a great motivator for you to find the home of your dreams sooner rather than later so you can buy while today’s affordability is still in your favor.
What Does This Mean for Sellers?
Make no mistake – this sellers’ market will remain in 2022 as home prices are projected to continue climbing, just at a more moderate pace. Selling your house while buyer demand is so high will truly put you in the driver’s seat. But don’t wait too long. With more listings projected to become available, your ideal window of opportunity to stand out from the crowd won’t last forever. Work with an agent who knows your local market and current inventory conditions to ensure you have the support you need to make an educated and informed decision about selling in the coming year.
Bottom Line
If you’re thinking of buying or selling, 2022 may be your year. Let’s connect to discuss your goals and the unique opportunities you have in today’s housing market.