Experts Forecast What The Housing Market Will Look Like In 2022
National Association of Realtors chief economist Lawrence Yun anticipates that sales will exceed pre-pandemic levels this year. Yun’s projection is based on the assumption that additional inventory will be available in the coming months. The increasing supply will be partly fueled by new house construction and the end of forbearance for struggling mortgage payers, which may prompt some homeowners to sell. Yun added that mortgage rates are expected to rise to 3.7 percent in 2022 due to consistently strong inflation.
According to Danielle Hale, chief economist at Realtor.com, home buyers will have a greater chance of finding properties in 2022 but will encounter a competitive seller's market. She forecasts a 2.9 percent increase in the value of existing homes and predicts that sales in 2022 will be the second greatest in the last 15 years, only after 2021.
Redfin, the online real estate brokerage, believes the housing market in 2022 will be no more predictable than in the previous two years. Buyers would migrate away from the Sun Belt to more affordable Rust Belt areas such as Columbus, Ohio; Harrisburg, PA.; and Indianapolis due to rising housing costs in Austin, Atlanta, and Phoenix.
Meanwhile, Zillow predicts home values will increase by 11% in 2022, down from 19.5 percent in 2021. It anticipates 6.35 million existing-home sales in 2021, up from 6.12 million in 2021. They also forecast that many homes will have bidding wars, especially when the market heats up throughout the spring and summer shopping seasons.
So as you can see, there are different opinions of what 2022 will hold for buyers and sellers. We will keep an eye on the numbers and see who appears to be most accurate as time goes on.
Fear Of Even Higher Mortgage Rates May Be Heating Up Winter Homebuying
Mortgage rates have risen to their highest level in almost a year, making homebuyers concerned that their affordability window closes faster than anticipated. Although home prices are still growing, and winter is traditionally the weakest season for the property market, buyer demand for mortgages has increased.
According to the Mortgage Bankers Association's seasonally adjusted index, purchase loan application volume increased 2% last week compared to the prior week. Applications were still down 17% from the same week a year ago, but some of it is owing to the market's significantly reduced supply. For 30-year fixed-rate mortgages with conforming loan sums ($647,200 or less), the average contract interest rate jumped to 3.52 percent from 3.33 percent for loans with a 20% down payment. Last month, inventory did not grow as it usually does in December.
Next weeks potential market moving reports are:
Monday, January 17th – No Report
Tuesday, January 18th – Home Builders Index
Wednesday, January 19th – Building Permits, Housing Starts
Thursday, January 20th – Initial Jobless Claims, Continuing Jobless Claims, Existing Home Sales
Friday, January 21st – Leading Economic Indicators