Property investing is a massive undertaking, regardless of the property’s intended use. Property owners and potential investors will have been waiting for industry gurus to share their predictions for what the market will do in 2022. Would it swell in response to the financial devastation of 2020/2021? Or would it go the other way and completely bottom out?
We’re now three months into 2022, and it’s safe to say that industry analysts were correct about the trends they predicted in 2021. We’ll go over them one by one and provide data insights to back up these 2022 housing market projections.
What Were the Housing Market Predictions for 2022?
Prediction Number One: The Post-Pandemic Rebound Will Continue
The experts were absolutely correct on this one. In fact, some predicted that the rebound would wane by the beginning of the second quarter of 2022, but it shows no indications of slowing down.
According to Ramsey Solutions, 6.9 million property sales are expected in the United States in 2022. They’ve gone so far as to predict 7 million house sales in 2023. “To help you put those property costs into dollar signs, the median home cost grew to just over $346,900 last year—more that’s than $50,000 higher than in 2020!” the site continues. 4 And certain months saw significantly larger increases in median home prices. For example, the median home price in December was $358,000, indicating that we are on track for even higher prices in 2022. And don’t forget about the impact interest rates will have on the entire cost of your property! Interest rates were at an all-time low last year, ranging between 2.15–2.39 percent for a 15-year fixed-rate mortgage and 2.74–3.10 percent for a 30-year fixed-rate mortgage.”
Prediction 2: Buyer demand will remain at or exceed 2021 levels later in the year
More people are in need of property as the population expands. This results in one of history’s greatest supply and demand imbalances. Millennials are increasingly financially capable of purchasing real estate, and the construction industry simply cannot keep up.
Buyer demand was expected to remain robust, and it has actually climbed since the beginning of 2022. Because houses are in short supply, they sell quickly because prospective purchasers do not want to miss out on the opportunity.
“One of the most frequently held housing market predictions for 2022 is that inventory will remain constrained but price appreciation will be slower than it was this year ,” according to Norada Real Estate Investments. While listings are likely to grow in the spring and summer, it is unclear that there will be enough to meet demand. The housing market has been especially strong in 2021, with significant demand for properties in practically every region of the country. The similar pattern will be repeated in 2022.”
Prediction 3: House prices will rise more
In 2021, the post-pandemic boom hit hard, and property prices skyrocketed. Some have said that because modern organizations have chosen to remain in a remote working style, employees were yearning for improved living conditions. Others attribute this to the fact that most people saved a significant amount of money in 2020 as a result of spending at least a quarter of the year in near-total lockdown.
In any case, prices will continue to rise in 2022. They may not rise at the same rate as last year, but industry participants agree that they will be higher at the end of 2022 than they were at the start.
According to MarketWatch, the following happened: “While sellers’ power will remain firmly in their hands this year, according to Nicole Bachaud, a Zillow economist, prices will rise significantly.” “We’re seeing monthly growth increase earlier in the year than usual,” says Bachaud, “but we don’t expect it to jump as much as it did in 2021.” According to Zillow data, property values increased 19.6 percent in 2021 and are expected to rise 16.4 percent in 2022.”
Prediction 4: Mortgage Interest Rates Will Rise
Everyone predicted that mortgage rates would rise. However, the extent to which they would do so differed depending on who you questioned. Here are some market analysts’ predictions.
• According to Michael Fratantoni, chief economist for the Mortgage Bankers Association (MBA), interest rates could hit 4% by the end of 2022.
• According to Lawren Yun, chief economist at the National Association of Realtors (NAR), mortgage rates will reach 3.7 percent.
• CoreLogic’s deputy chief economist, Selma Hepp, forecasts interest rates will be closer to 3.4 percent.”
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