Higher mortgage rates will end double-digit price growth and new listings will hit a 10-year high.
2022 will bring more balance to the housing market. But don’t expect a buyer’s market; just more selection, less frenzy and slower price growth. We will see a rush to buy homes at the start of the year before mortgage rates rise. That early onslaught of demand will deplete the supply of homes for sale. In the second half of the year, a much needed increase in new construction will boost sales slightly. In 2022, there will be 1% more sales than in 2021, and by the end of the year, home price growth will slow to 3%.
Prediction #1: Mortgage rates will rise to 3.6%, bringing price growth down to earth
We expect 30-year-fixed mortgage rates to rise slowly from around 3% to around 3.6% by the end of 2022, thanks to the pandemic subsiding and lingering inflation. That would mean about $100 more per month in mortgage payments for the median home.
By winter, higher mortgage rates along with already high home prices will likely slow annual price growth down to around 3%, which represents a steep drop from the record 24% increase posted in May 2021. If annual price appreciation falls to 3%, it would only be the second time it will have fallen so low since the end of the housing crash in March 2012. This low price growth will likely discourage speculators from entering the market and allow more first-time buyers to have a chance at winning a home.
Click here for more information: https://www.redfin.com/news/housing-market-predictions-2022/