It's no secret that the U.S. housing market has been tearing lately. Home prices are up, inventory is down, and buyers scramble to find their perfect home before someone else snatches it up. But what does the future hold for the housing market? Will the good times keep rolling, or is a crash on the horizon? Of course, predicting the future is never an exact science, but some experts have looked at trends and data to give us their best guesses of what we can expect in 2022.
Here's what they had to say:
The pandemic has created "pent-up demand" for housing, which will continue into 2022 and beyond.
Migration from high-tax states to more affordable ones will pick up again in 2022.
The rise in remote work will lead to a boom in second home buying, especially in rural areas.
Millennial buyers will continue to drive the market as they enter their 30s and move out of renting.
Key housing market takeaways for 400+ U.S. metro areas:
The median home sale price was up 13% year over year. This growth rate is down from the March peak of 16%.
The median asking price of newly listed homes increased 15% year over year, but was down 2.8% from the all-time high set during the four weeks ending May 22.
The median asking price home mortgage payment hit $2,389 per month at the current 5.54% interest rate.
Pending home sales were down 13% yearly, the most significant decline since May 2020.
New listings of homes for sale were down 1.4% from a year earlier.
41% of homes that went under contract had an accepted offer within the first two weeks on the market, down from 46% a year earlier.
28% of homes under contract had an accepted offer within one week of hitting the market, down from 33% a year earlier.
Homes that sold were on the market for 19 days, up from 18 days a year earlier and up from the record low of 15 days set in May and early June.
49% of homes sold above list price, down from 54% a year earlier.
On average, 7.3% of homes for sale each week had a price drop, a record high as far back as the data goes, through the beginning of 2015.
The housing market is getting tighter! The average sale-to-list price ratio, which measures how close homes are selling to their asking prices, declined this past year and now sits at 101.4%. In other words, the average home sold for 1.4% above its asking price.
Leading indicators of homebuying activity:
- Fewer people searched for “homes for sale” on Google—searches during the week ending July 2 were down 2% from a year earlier.
- Touring activity as of July 3 was down 14% from the start of the year, compared to a 7% increase at the same time last year, according to home tour technology company ShowingTime.
- Mortgage purchase applications were down 17% from a year earlier during the week ending July 1, while the seasonally-adjusted index was down 4% week over week.
So, what does all this mean for you? If you're considering buying or selling a home in 2022, it's crucial to stay up-to-date on these trends to make the best decisions for your situation.
And if you're on the fence about whether now is the right time to buy or sell, remember there's no time like the present! There is a significant probability that the housing market will only be going to keep heating up, so if you're thinking of moving and you have financial possibilities, now is the time.