This is all you’ve got? Talk about bold predictions. From MarketWatch:
‘Home price growth may return to normalcy.’ 5 economists and real estate pros predict what will happen in the housing market in 2022
Prediction 1: Mortgage rates will rise
“Mortgage rates snapped upward in January as mortgage investors realized what the Fed intends to do, which is raise interest rates aggressively this year,” says Holden Lewis, home and mortgage expert at NerdWallet. “Now, mortgage rates are rising more gradually as markets wait for the Fed to clarify their timetable.”
Prediction 2: Home price growth may ‘return to normalcy’
Heym says the market is suffering from record-low inventory levels, which has driven prices to new highs even as the number of sales has declined. “I don’t expect this to change in the next few months as home builders can’t build houses fast enough to help the supply issue,” says Heym. Specifically, Yun says home prices are solidly higher by double-digit percentages compared to one ago. “However, with mortgage rates moving up and some home buyers getting priced out, home price growth will return to normalcy, to around 5% for all of 2022,” says Yun.
Prediction 3: Expect near-term bidding wars
The clock is also ticking as 2021 interest rate locks with 60-90 day expirations are set to mature any day. But what does this mean for buyers? Essentially, they’re rushing and overbidding on properties in the hopes of securing a low interest rate before the next Fed increase. “This is causing bidding war frenzies,” says Pierre Debbas, managing partner of real estate law firm Romer Debbas LLP.
Prediction 4: It will still be a tough market for buyers though
Buyers will continue to have limited options in most areas as inventory will remain scarce, pros say. “Prices will continue to rise, which combined with higher mortgage rates, will drive some buyers out of the market,” says Heym. That said, it will continue to be a strong seller’s market, which means if you’ve been thinking about listing your home — there’s no time like the present.
Prediction 5: But there are still wildcards
The big wildcard is the permanency of work-from-home policies or even hybrid models of employment. “That will lead to changes in residential locational choices with more households willing to buy a home farther away from job locations and home price growth therefore will be stronger in small towns and exurbs compared to downtown locations,” says Yun.
Prediction 6: Spring will bring more activity
With the spring home shopping season right around the corner, expect activity to heat up. “It’s likely inventory and sales will pick up over the next few months,” says Bachaud.