Housing Market Predictions for End of Year 2021 and 2022

 While 2021 had its moments of turbulence, the real estate market exceeded expectations and broke records along the way. 

So the question is: will the 2022 housing market continue to follow the same trajectory, or are we facing a possible downturn? 

Let’s see what leading real estate experts are projecting for the final quarter of 2021 and what to expect in 2022 so you will be prepared if you make any real estate changes in 2022. 

HOUSING MARKET FORECAST 

Here’s what experts are saying about what’s going to happen with real estate for the rest of 2021: 

  • Interest rates are rising but projected to stay low 

  • One of the biggest drivers for 2021’s booming real estate market was record-low mortgage rates. 

  • Due to the record-low mortgage rates, affordability reached one of the highest levels it has in the last 30 years.  

  • The good news is, experts are predicting that mortgage rates will remain low for the foreseeable future. 

While home prices continue to appreciate acrossthe counter of the low mortgage rates means homes are still affordable to purchase, even though slightly less than it was at the beginning of 2021. 

 

HOME SALES ARE SLOWING BUT STILL STRONG 

There’s no doubting it. The last two years have been some of the craziest years in the history of real estate.  

While experts are noticing home sales slightly slowing, not to worryThe real estate market is returning to a more balanced one than we have seen in recent years.  

HOME PRICES ARE APPRECIATING SLOWER TOO 

In 2021, home values soared which created fear a housing bubble was forming. 

This year’s home price escalation was a bit excessive. However, this was simple economics – high buyer demand coupled with extremely low supply. 

As inventory starts to grow, experts anticipate price appreciation will slow. 

It’s inevitable, foreclosures will happen – but won’t lead to home price declines. 

High unemployment from the pandemic led many homeowners across the country to enter mortgage forbearance. 

It will be a while before we reach the pre-COVID levels of employmentUnfortunately, foreclosures are expected to rise. 

However, experts don’t anticipate a foreclosure crisis as we saw in 2008 or the major home value depreciation that followed. 

IS THE HOUSING MARKET GOING TO CRASH BEFORE 2021 ENDS? 

Do all these signs point to a housing market crash?  The answer, according to top real estate experts, is a “no.” 

While traumatic memories of the housing crash of 2008 are on the minds of many buyers and sellers, today’s market conditions do not resemble anything close to what caused it. 

Home price appreciation may be high, but it’s also a result of too many buyers and too few homes for sale. 

The forbearance situation should be balanced out by the large number of equity homeowners currently have – meaning they can choose to sell rather than foreclose. 

WHAT DOES THIS MEAN FOR BUYERS & SELLERS FOR THE REST OF 2021? 

There is still a motivation for buyers and sellers in the market.  With both inventory and mortgage rates remaining low, both sides of the real estate transaction stand to benefit from making a move before the end of the year. 

Waiting until next year could mean losing out on a less competitive market and better affordability. 

2022 HOUSING MARKET PREDICTIONS 

As 2021 draws to a close, you’re probably already getting questions from clients about what experts are projecting for the 2022 market. 

The past two years have been full of exciting and record-breaking moments. It’s also seen its fair share of buyer fatigue, hesitancy, and confusion. 

Here’s what industry experts are saying about what they anticipate for the 2022 housing market. 

 

HOME PRICES 

So, what does the future hold for home prices? 

It’s important to remember that the 2021 market was anything but normal, and that escalating home values were a direct result of record-low inventory. 

However, experts believe that the inventory situation should improve in the coming year, stabilizing price appreciation across the nation. 

But will home prices depreciate in 2022? Industry experts don’t think so. Instead, they are projecting a more modest appreciation of 5.82% in the next 12 months compared to the 11.74% rise seen on average in 2021. 

MORTGAGE RATES 

In case you didn’t know, the past year saw the lowest mortgage rates in the history of real estate. 

If we look at the 30-year mortgage rate chronicled by Freddie Mac, we can see the average rates by decade: 

1970s: 8.86% 

1980s: 12.7% 

1990s: 8.12% 

2000s: 6.29% 

2010s: 4.09% 

While experts don’t project that mortgage rates will rise a huge amount, any increase would mean an increase in monthly mortgage payments.  A couple of decimal points may not seem like a lot to most people, but it could make or break someone’s budget.  rise in mortgage rates coupled with continued home price appreciation only means one thing: paying more for the same house they’d buy now. 

HOUSING INVENTORY 

Inventory has been, without a doubt, the biggest player in the anything but ordinary real estate market we’ve experienced in the last two years.  The good news is, there are many factors that lead industry experts to anticipate a rise in homes for sale. 

Here’s why: 

Homeowners may be more confident putting their homes on the market as COVID numbers continue to drop and more people become vaccinated. 

Many of the obstacles halting or slowing new construction start to fade and those homes come on the market, adding new inventory and meeting the needs of population growth. 

As forbearance comes to a close, experts predict a wave of new homes coming to the market. However, they don’t anticipate the majority of these to be foreclosures. Instead, because of built-up equity, homeowners in this position will have the opportunity to sell instead. 

While more inventory may take a bit of the edge off of today’s competitive market, it’s important to remember there will be more homes to choose from. 

BOTTOM LINE 

If we’ve learned anything in the past couple of years, it’s that while we can project the future, we can’t predict it.  While industry experts don’t expect the 2022 housing market to be as volatile as 2020 or 2021, it’s important to stay on top of the latest insights.   Contact The Aaronson Group today for all your real estate questions and needs.  Call 949-388-5194 or email us at info@previewochomes.com 

 

 

 

 


 

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