With economic conditions and the expectations of buyers and sellers changing seemingly every day, it’s a tough time to forecast the direction of the US housing market.
Real estate listings website, Realtor.com has now updated its 2022 housing forecast to reflect these changes, predicting the market will stabilize while demand cools and supply grows.
Let’s take a more detailed look at the forecast and what it means for US housing market predictions and prospective homebuyers and sellers.
One of the most significant changes to note is the increase in mortgage rates, which ended up higher than many expected in 2022, thanks to the roaring inflation and the monetary policy response we’ve seen this year.
At the start of 2022, few would have foreseen that inflation and living costs would rise to the extent they had — never mind some of the geopolitical events that have exacerbated these trends.
Realtor.com now expects mortgage rates to reach 5.5% by the end of the year, compared to an initial 3.6%. However, the bulk of this increase has already taken place.
They can serve as warning indicators to real estate investors and prospective home buyers that the cost of living is rising, local incomes are declining, and that the financial situation of home buyers is deteriorating.
Realtor.com expects a decrease of 6.7% in sales this year, which is a massive change from its previous prediction (an increase of 6.6%). Realtor.com also gave forecasts for the number of homes to be listed and what they anticipate will stay the same.