The 2022 housing market is expected to see strong sales volume with low to moderate home price increases driven by buyer demand, lack of supply, and offset by rising interest rates. Of course, no one has a crystal ball, but the underlying data is driving current projections.
Below are a few highlights:
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Interest Rates – Interest rates are projected to increase averaging around 3.3% in early 2022 and steadily increasing with the Mortgage Bankers Association (MBA) projecting rates to reach as high 4% by the end of the year; others are projecting around 3.5-3.7% by year-end. The Fed recently announced that it will end its bond purchasing by March and currently is planning for 3 interest rate hikes during 2022, which can always change. Interest rates are still low by historical standards, which will continue to drive demand.
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Home Prices – Home price increases should subside and be in the low to mid single digit in 2022. Rising interest rates and affordability will keep price increases from their historical increase in 2021. Pent up buyer demand, lack of inventory, and low interest rates by historical standards will support prices.
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Home Sales Volume – 2022 is expected to be another strong year in the volume of sales as buyer demand remains strong and sellers still on the fence from the pandemic will look to list their homes for sale to either trade up, trade down, and/or cash in on their equity gains.
