Detailed Housing Forecast for 2022 Released
Every year, national real estate titan Realtor.com releases a detailed housing forecast full of predictions for the coming year. Using analysis of current real estate trends and financial data, they forecast the future of the national real estate market. The recently released report for 2022 shows predicted continued growth and competition in markets around the country.
2021 saw huge home price increases, and it seems that this is expected to continue into 2022. The Realtor.com report estimates that home prices will increase by 2.9%. In a market where buyers are already struggling to afford the soaring home prices, this does not come as great news. Luckily this is down drastically from the increases seen in 2021. Adding to the struggle for affordability for buyers is the increasing mortgage interest rates. The forecast predicts the interest rate to hover around 3.3% for most of the year, eventually climbing to 3.6% by year's end. Inventory should pick up a bit, according to Realtor.com. They are expecting to see an existing home inventory increase of 0.3%. Though this might sound marginal, this is good news compared to the 2021 estimates of existing inventory down by more than 18%. The hope is that new construction will pick up the slack in many markets. Though with the supply chain issues facing the building industry, this remains to be seen.
Home sales are expected to reach a 16 year high in 2022, with total purchases expected to be up 6.6%. Suburbs are looking like the most likely places for transactions, as more and more buyers are expected to leave big cities. In fact, Realtor.com predicts 1 in 5 buyers to move farther out, away from metropolitan areas as they have to be in their offices less and less.
The rental market is set to be strong again in 2022, outpacing home sale prices. Rental prices are expected to be up another 7% in 2022. This is concerning to many renters who have endured the skyrocketing rental prices seen in 2021 already.
Industry experts see 2022 as a year that will continue to be a challenge for buyers, with slowing but still increasing home prices and more competition for inventory. Luckily the numbers appear to be more in their favor than 2021, but it looks to be another year of turmoil for buyers across the country. Here in the Florida Keys housing market, we expect the national numbers to be reflective of what we will see here as well. As 2022 moves on, we will see how accurate the housing forecast released this week actually is!
