2022 Housing Market Predictions
The past few years have been a wild ride for everyone involved in real estate. Sellers have seen their homes quickly appreciate while buyers have had to engage in never-ending bidding wars (though were fortunately were able to lock in low interest rates). This leaves many wondering what could be in store for 2022. While unfortunately no one has a crystal ball, there are a few predictions that can be made.
So — What is Next for Real Estate?
As many can imagine, the current rate of appreciation is not sustainable. If housing prices keep significantly outpacing salaries, millions of hopeful home buyers will be in the position of never affording a home. Fortunately, the price of homes has come down slightly since the peak and is predicted to continue that way throughout 2022. Consider this: median home prices hit a peak of $362,800 in June 2021 through have now stagnated to a price of around $350,000.
Another prediction is a further increase in interest rates, with some professional organizations expecting them to hit 4% by the end of 2022. That said, an increase in interest rates does not necessarily go in lockstep with a decrease in buyer frenzy over real estate. (Hey — the 1980’s saw an 18% interest rate, but consumers still continued to buy.)
A few other notable expectations for housing in 2022 include a decrease in iBuyers (instant buyers) and a continued increase of diversity in the housing market. The decrease in iBuyers comes at the heels of Zillow shutting down its’ Zillow Offers program. Many iBuyers faced skepticism as they consistently paid above market value for homes, which is shocking in a quickly appreciating market. Additionally, some other good news: new homeownership is expected to continue on a path of becoming more diverse, with Hispanics predicted to become a majority of new homeowners in the US by 2040.
All in all, the year of 2022 is expected to be a calmer one than what was seen over the previous few years. Houses are not expected to continue skyrocketing in value, and interest rates are expected to continue their slow rise. Many believe there will be a decrease in iBuyers, and that diversity will continue to increase among new homebuyers.
Originally published on Omid Chaman’s website.