(ABC4) – The housing market in 2021 proved to be a competitive one. As the year comes to a close, some prospective buyers and sellers may be left wondering what’s to come for 2022. Realtor.com has revealed their housing forecast for 2022 and they anticipate an energetic year ahead for buyers, especially first-timers.
Americans will have a better chance to find a home in 2022, but will still face a competitive seller’s market as first-time buyer demand surpasses the inventory recovery, a press release says.
The 2022 for-sale home supply is expected to begin recovering from recent declines, but millennial demand will likely keep supply limited through at least 2025.
Listing prices, rents, and mortgage rates are all expected to climb while income rises.
“Whether the pandemic delayed plans or created new opportunities to make a move, Americans are poised for a whirlwind year of home buying in 2022. With more sellers expected to enter the market as buyer competition remains fierce, we anticipate strong home sales growth at a more sustainable pace than in 2021,” said Realtor.com Chief Economist Danielle Hale. “Affordability will increasingly be a challenge as interest rates and prices rise, but remote work may expand search areas and enable younger buyers to find their first homes sooner than they might have otherwise. And with more than 45 million millennials within the prime first-time buying ages of 26-35 heading into 2022, we expect the market to remain competitive.”
The supply gap of construction of new homes is expected to shrink somewhat in 2022 as builders continue to drive the momentum up for the production of homes with a projected increase of 5% year-over-year.
With more sellers entering the market this winter, Americans will have more opportunities to make a successful home purchase. Due to the increase in workplace flexibility, more home shoppers will be able to buy their first homes without going over their budgets.
Rent is also forecasted to grow at a faster annual pace of 7.1% than for-sale home prices which are forecasted to grow at 2.9%.
Homebuying may become the more affordable option when compared to renting in 2022. Despite the challenging market, the homeownership rate is expected to grow marginally in 2022.