With the end of the year quickly approaching, it’s time to take a closer look at the predictions for 2022.

In this article, we’ll review all of the expert forecasts for the year to come, and what that information means for you as someone who is looking to purchase a home. 

Mortgage Rates Projected To Rise

Mortgage rates are predicted to increase as we head into 2022. However, they are still predicted to remain historically low, so there is still a massive opportunity to take advantage of this as you enter into the new year. Experts predict 2022 to be as followed:

  • Fannie Mae - 3.3%
  • Freddie Mac - 3.5%
  • MBA - 4.0%
  • NAR - 3.5%

However, compared to what we’ve seen in previous decades, these prices are still very appealing. The graph below from Keeping Current Matters depicts the average rates that we have experienced by decade.

Home Prices Expected to Appreciate

All indicators show that home prices will continue to rise through the new year due to low housing supply and high buyer demand. The experts range in their predictions on what we might see, from NAR estimating an appreciation rate of 2.8% to Fannie Mae predicting a rate of 7.4%. The average of all forecasts comes out to about 5.1%.

Inventory levels will remind limited but are expected to grow ever so slightly to 0.3% on average in 2022 according to realtor.com. 

It’s important to note that while home prices are predicted to increase, rent prices are likely to follow suit. Realtor.com predicts that home prices will increase 2.9% in 2022, but rent will outpace home prices, rising 7.1%. 

Home Sales Projected To Be Strong

Experts predict that home sales will continue to perform well again in the new year as more and more people move to meet their changing needs, whether that’s an office to accommodate remote work or a bigger yard to turn into an outdoor oasis or a dream come true for your pup. 

Additionally, there are more than 45 million millennials in the prime first-time home buying ages of 26 to 25 in 2022 according to realtor.com, also contributing to the demand for housing. 

Additionally, sales are predicted to remain strong throughout the winter months. More and more people are searching for their next home now rather than waiting for the spring season to come around. Lawrence Yun, Chief Economist as the
National Association of Realtors (NAR) points out:

“Compared to other past winter seasons, this winter season’s sales activity will be stronger…This winter there will be more sales compared to pre-pandemic winters going back all the way to 2006.”

The graph below from Keeping Current Matters depicts the 2022 sales forecast compared to what we saw in 2021:

Bottom Line

As we round out the year, we set our sights on 2022. Interest levels are predicted to still be lower than what we have seen in previous years, and inventory is expected to grow every so slightly. However, buyer demand is still predicted to be strong and prices are expected to continue to increase. What does this mean for you? It means that now is the perfect time to ramp up your home search. Take advantage of this season where many buyers put their home search on hold and work with your trusted agent to come up with a strategy to get you into that dream home early in the new year!