Market Experts Look Ahead to More Irregularity in 2022

With home sales steadily on the rise and a greater influx of buyers entering into a competitive market, 2022 will likely be another whirlwind year for home buying, real estate experts predict. Though housing prices will remain high, a gradual uptick in mortgage rates paired with workplace flexibility could mean greater affordability and more options for buyers with wider search parameters.

Supply chain delays and continued inflation will impact every facet of home buying and keep prices relatively high for months into 2022, but many experts expect price growth to slow by late fall, reports Forbes. More buyers are also expected to take climate change into consideration when searching for a home, a new trend exacerbated by intensifying natural disasters across every region of the US.

Danielle Hale, Realtor.com chief economist: We expect a whirlwind 2022 for the housing market. Home sales are expected to increase another 6.6% and home prices to rise another 2.9% on top of 2021 highs. 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. 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.

Although 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. On top of this, all home shoppers will have some advantages that stem from a competitive jobs market. 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. 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.

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