NAR’s Chief Economist Predicts Strong and Stable Housing Market in 2022

During the National Association of Realtors’ 2021 REALTORS Conference and Expo in San Diego this month, NAR’s chief economist, Lawrence Yun, made predictions about next year’s national real estate market. Yun commented that the housing market surged throughout the pandemic, a fact that has been easy to see across the country. Nationwide home sales have been the best they have been in 15 years, according to Yun. At the conference, Yun predicted that in the coming year, housing markets will remain quite successful and strong, but will not outperform the success of 2021.

What factors led to his real estate forecast? Several things, in fact. First, Yun believes that we are just in the beginning stages of Americans understanding and settling in to remote work and what that means for living situations. As this begins to play out over time, it will be easier to see the full effect of remote work on real estate markets. For now, however, it remains unpredictable. Another factor leading to his observations is the jobs market. While many markets have recovered completely from pandemic-era job losses, others are still struggling to add jobs. Even though 18 million jobs have been reportedly added since America emerged from lockdown, and the unemployment rate sits at around 4.6%, the nation is still down 4 million jobs from pre-pandemic numbers. This is keeping housing markets from reaching their potential, according to Yun.

While Yun believes that next year will see fewer home sales than 2021, he still believes that the housing market will remain stronger than pre-pandemic levels. This is based on his belief that the supply of inventory will pick up in 2022. Inventory will be generated, according to Yun, from increased building nationally as well as from homeowners emerging from forbearance and needing to sell. The increased inventory will stabilize the market in 2022 and relieve the competition on the housing markets that has resulted in multiple offers and bidding wars. This will also stabilize pricing. He predicts that, while home prices will continue to rise, they will do so at a much slower rate than we saw in 2021.

Other predictions by the chief economist included a mortgage interest rate rise to around 3.7% in the next few months due to rising inflation, as well as rental rates soaring nationwide.

Those involved with the Florida Keys housing market have seen the impact of these nationwide trends. An influx of homes for sale in the Keys would be a welcome change for buyers who have been unsuccessful in this competitive market. While sellers have enjoyed the fewer days on market and higher sales prices, it seems that 2022 could be a better year for buyers in the Florida Keys!