We’re in the midst of historically low interest rates that are driving a hot housing market, but what goes up, must come down, and I expect the housing market will slow after the new year as interest rates will undoubtedly go up. Jarred Kessler, founder and CEO of EasyKnock : As the country begins to move towards a new post-pandemic normal, I expect lingering economic uncertainty will continue to drive the unpredictable housing market in 2022.
Home sellers will also likely make significant investments in climate-change resilient home features in order to appeal to climate-conscious home buyers. In 2022, we also predict home buyers will start considering climate change as a major factor in their home-buying decisions, as natural disasters and extreme weather events continue to increase in frequency. This low price growth will likely discourage speculators from entering the market, giving first-time home buyers a better chance at securing a home. We expect 30-year-fixed mortgage rates to slowly rise from around 3% to around 3.6 by the end of the year, mostly attributed to the pandemic subsiding and inflation continuing to linger.īy late fall, high mortgage rates, paired with already high housing prices, will likely slow annual price growth to roughly 3%. AFP via Getty Imagesĭaryl Fairweather, chief economist for Redfin : After two years of unprecedented uncertainty in the housing market, we’re expecting 2022 to be just as unpredictable. This should free-up potential home buyers to broaden their search parameters to include the suburbs and in some cases even completely new, less pricey metro areas.Įxtreme weather from climate change has home builders reconsidering how they design and power new. Incomes are projected to increase by 3.3% and with many employers looking to attract and retain talent without impacting costs, we expect workplace flexibility will continue. On top of this, all home shoppers will have some advantages that stem from a competitive jobs market. Demand from these young households will keep the market competitive and fast-paced despite a small uptick in housing inventory as builders continue to ramp up production, increasing single-family starts by 5% in 2022.Īlthough affordability challenges will come from rising prices and mortgage rates, rising rents, which are projected to increase 7.1% will be a strong motivator for many hopeful first-time buyers. A gradual uptick in mortgage rates will make affordability a top consideration for home buyers, especially the 45 million Millennials aged 26 to 35 who are at prime first-time home buyer age. Home sales are expected to increase another 6.6% and home prices to rise another 2.9% on top of 2021 highs. Danielle Hale, chief economist: We expect a whirlwind 2022 for the housing market.