What’s going to happen in the 2022 housing market? Find out here.
What can we expect from the 2022 housing market? Today we’ll share our predictions about the upcoming year, but first, we’ll need to discuss a few key components of the housing market: mortgage rates, home prices, and inventory.
We expect to see mortgage rates go up at the beginning of 2022. Experts seem to agree that they’ll be around 3.3% at the start of the year and rise toward 3.7% by the end of 2022. Of course, no one has a crystal ball that lets them see the future, but we do know that rates tend to go up when things are going badly in the economy and go down when things are good.
Many people are concerned about the home price forecast. Honestly, we expect more of what we’ve seen in 2021, although not at the same rate. Home prices appreciated around 20% in 2021, give or take 5% or 10% depending on the area. Experts project anywhere between 5% to 7% appreciation year over year for 2022, though reports from Orange County suggest we may see 8% to 10%. Every area is different, and that’s part of why it’s so important to partner with a real estate professional—they can help you navigate the complexities of the market.
In terms of inventory, words like “crisis” and “catastrophe” have been thrown around in 2021. In Orange County, we have somewhere around 1,200 homes on the market; back in 2019, we had over 7,500 at the peak of the market and around 4,000 around this time of year. Truth be told, the lack of inventory is the biggest challenge we’re facing in the market. Many buyers are struggling to find homes, and even sellers are having a hard time; they want to put their homes on the market for an amazing price, but they’re just not confident they’ll be able to find another house to buy.
If you’re planning to buy or sell a home in 2022 or have any questions about how market conditions will affect your goals, don’t hesitate to reach out to us. We’d love to help you.