Housing Market Report: Expert Predictions for 2022

Housing Market Report: Expert Predictions for 2022

It’s a new year, but it’s relatively the same market. Here’s what you can expect to see based on the known experts, as we continue to navigate the pandemic, inflation, supply chain issues, and more in 2022. 

The bottom line, however, is this: there’s a good market coming up in 2022. And, of course, we’re here to help educate you to make the best decision for you (and your family) when it comes to buying, selling, or investing in real estate, and we’ll assist in navigating the market with you. 

The driving force

Inventory will be the catalyst for all other factors this year. As Bill McBride, Founder of Calculated Risk, summarizes: “It is possible that rising mortgage rates will slow the housing market… or the Fed might raise rates sooner than expected due to the recent pickup in inflation… but I believe one thing is certain: Inventory will tell the tale!” 

The reality is that listings are currently at record lows, which is due to low interest rates and uncertainties surrounding inflation, coronavirus, and more, but realtors cannot sell what we don’t have. Just in our local area, the listings in Virginia and Maryland have decreased by 28 and 12%, respectively, with only D.C. having a slight increase of 3.4% when you compare 2021 to 2020. And we all remember how crazy 2020 was. 

It’s “show time!”

There were strong showings in November 2021 and the market is NOT slowing down by any stretch of the imagination. In respect to what we’ve been calling the last “normal” years (2017, 2018, and 2019), 2020 and 2021 absolutely crushed pre-pandemic numbers with stronger showings and stronger inventory and “buyer demand remains strong” as Michael Lane, VP & General Manager of ShowingTime indicated. 

The pandemic has yet to deter buyers who want to capitalize on the still historically low interest rates, which are expected to rise a bit in 2022; however, anything between 3 and 5% is excellent, and all of the experts and market prognosticators are estimating rates to remain in this range, if not lower. 

All of the “big guns” in the industry, to include Fannie Mae and her friends, are projecting between 3.2 and 4% for mortgage rates. 

These low rates have helped speed up the estimated time on the market as well for each house. In November 2021, the national average was just 18 days before final offers were accepted and approved, and, if you’ve been following us for a while now, you’ll know that most houses are receiving multiple offers– especially in sought-after areas. 

Expect quick selling times in 2022 as well, and if you’re planning on buying make sure you prepare accordingly (see our previous blog posts for more tips and how to get pre-approved). Home prices have either peaked or are plateauing currently as well. 

Equity gains

2021 was another historic year for home equity growth as well. Experts at CoreLogic stated that this past summer, “home price growth reached the highest level in more than 45 years, pushing equity gains to another record high.” A whopping $57k was the average home equity gain for homeowners with mortgages across the country. Locally, VA saw an average increase of $46,000, MD also averaged $46k, and D.C. provided an average boost of $29,000 in 2021. 

If you’re looking to capitalize on the biggest financial benefit of homeownership and wealth-building, you may want to give us a call to see how we can leverage your home equity in 2022. In every major city in 2021, it was “cheaper to buy than rent” because of historic home equity increases. 

Homeowners had “an average of $294k in equity in quarter 3 of 2021– a historic high,” mentioned Odeta Kushi, Deputy Chief Economist (First American). 

The bottom line

2022 is going to be another strong year for the housing market. Housing sales are expected to reach a 16-year high this year, despite the slight increase in mortgage rates. If you want to review your options or would like further edification on anything we’ve summarized here about the current market, please give us a call and we’ll be happy to discuss your options with you. 

We wish you all a happy, healthy 2022! And if you’re in the market, get ready for some fun!