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Market News for 2022


Here are a few thoughts on the upcoming housing market. In short, we expect it will be similar to 2021, but with less price fluctuation. 2022, here we go!

Housing Market Recap

In 2021, home inventory was low, which resulted in a low number of home sales. This low supply also resulted in higher demand and higher sales prices, with 5-20% growth.

The biggest factors affecting home inventory were supply chain issues and labor shortages. In addition, building materials continued to be expensive, which affected both homebuilders as well as homeowners hoping to renovate. 

Forecast for 2022

The future is particularly hard to guess right now. The supply bottleneck and labor market are still factors in inventory. Prices continue to rise, but are not expected to do so exponentially as they did in 2020 or 2021. Experts predict growth will be closer to 4-5% over the year. 

Lumber prices have decreased which will be positive for builders and home inventory. The number of sales is expected to increase moderately over the year but will still remain generally low.

Foreclosures

The uptick in foreclosures is not considered high compared to historic levels. Since one of the biggest drivers of foreclosures is declining home prices, we don’t expect to see a surge this year. In addition, renters and homeowners continue to have access to national assistance programs which help to keep more people in their homes. 

Inflation

Inflation is a monetary issue–when too much money is supplied to the economy, it raises the prices of goods. However, typical inflation varies across countries. Currently, short term price increases are due to the bottleneck of durable goods. Once the supply problem is solved, we are likely to get back to a steady price for goods.

Mortgage rates

The average interest rate for a standard 30-year fixed mortgage is 3.34%, which is trending upward from lows in 2021. With low rates and increasing consumer confidence, more new buyers may enter the market this year. Demand for new homes will remain very high. 


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