The Housing Market Of 2022

We’re currently experiencing a red-hot market, rooted in recession-induced low mortgage rates. Since the pandemic began in 2020 people have become more inclined to move away from their offices, due to more remote opportunities. There’s also been an elevated number of millennial homebuyers since the core of that demographic is hitting the age of first-time home purchasing, which tends to be in their 30s.

However, this brings us to another trend within the housing market: There’s about to be a massive supply-demand inequity. There just aren’t enough homes for a large influx of buyers, this is due to years of under-building, and price growth is about to be out of control. The housing shortage, as it’s referred to, is seen as the most permanent issue of all of the current supply shortages.

There’s also speculation that the Federal Reserve will raise mortgage rates to balance out inflation. This then leads us into the forecasting that home prices will rise between 13% (Zillow) and 16% (Goldman Sachs) between now and December 2022. There’s also consensus that home appreciation, which reached a 12-month record between August 2020 and August 2021 staying at 19.9%, cannot be sustained like that for much longer. We’re also seeing the possibility of your home purchase becoming a bidding war reduced. In April 2021 you were 14% more likely to get into a bidding bonanza than now. So, those are the red-hot reasons to keep watching the market in the coming year.