5 Housing Market Trends to Look Out For During 2022

Last year’s perfect storm of supply constraints, low-interest rates, and record-high demand led to a sharp increase in home prices.

Here are five real estate trends you need to watch in 2022.

1. Mortgage Rates Will Continue Rising

After hitting an all-time low of 2.65% in January of 2021, mortgage rates have been on the rise. At the end of 2021, the average 30-year fixed-rate mortgage stood at 3.05%, based on data from Freddie Mac.

2. Buyer Demand and Competition Will Decline

In 2021, an unprecedented surge in buyer demand resulted partly from a lack of inventory, work-from-home trends, and supply chain constraints limiting new construction.

3. Home Value Appreciation Will Slow from Record Pace

Economists generally agree that the blistering pace of home price appreciation will slow significantly in 2022. Notably, most economists do not foresee a drop in real estate prices or worse, a housing market crash, only a slowing of the current trends.

4. New Home Construction Will Increase

In 2021, building supply and labor shortages contributed to home-builders’ inability to keep up with demand for new construction.

5. Real Estate Investors Will Continue Buying

According to Danielle Hale, chief economist at Realtor.com, as home prices and rents rose in 2021, real estate investors continued to be net buyers of single-family homes.

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