Housing Market Forecast for 2022

When the Covid-19 pandemic struck, it threw the housing market into a wild state. Many people were afraid or unable to move. Others lost their jobs. The pandemic made a huge impact on the housing market. Today, life is beginning to regain some sense of normalcy. However, certain factors will continue to affect home prices, the real estate market in general, and buyer behavior.

The Housing Market in 2022

Are you wondering whether the market will cool off or heat up in 2022? Currently, the housing market is a seller’s market. However, things seem to be shifting a bit. There are fewer bidding wars as more homes come into the market. However, you should not pencil in a price correction just yet. Some experts forecast a significant appreciation in home values across the United States.

Most millennials are hitting their thirties. This is the age when first-time home buying kicks into gear. The effects of the global pandemic on the housing market, low mortgage rates, and the work-from-home trend allowed home buyers to search into the burbs. This trend drove the housing market forward.

Today, the inventory is starting to rise. However, it is still below the pre-pandemic levels and unable to meet the demand. The forecast by many real estate firms is quite bullish. However, it is important to understand that it is extremely difficult to forecast growth in home prices. Below are a few predictions for the 2022 real estate market.

Home Buying Challenges

The housing crisis is currently facing various challenges. These include the housing shortage, income and deposit requirements for renters, and growing barriers to entry. This is the reason many people are having a difficult time finding a place to live.

Experts Expect More Millennials to Purchase Homes

Many millennials entered the housing market in 2020. Real estate professionals expect many more to do so in 2022. This is the age group driving the housing market in the United States. By investing in a new home, they are supporting the housing market, which should stimulate it for the next few years.

As home prices continue to increase, you might want to keep an eye on Boomers as well. Many of them realized an impressive financial gain on their homes over the years. Hopefully, the worst of the pandemic is over. Thus, many Boomers may choose to move.

Increase in Demand for Multifamily Homes

Currently, prices for single-family homes are quite high. This will probably lead to an increase in the demand for multifamily homes in 2022. This might cause rents to increase and vacancies to go down. Since the Covid-19 pandemic started, this has been a continuing trend, which, according to many experts, will continue in the next year.

Technology Will Drive Home Values

Real estate professionals expect homeowners and developers to increase their interest in using technology to prop up the value of their assets. They will look for more ways to use technology to drive positive climate and financial outcomes.

The Rental Market Will Grow

The U.S. is gradually becoming a renter nation. This trend should keep growing into 2022 due to the current inflated housing prices. Rental properties will have to meet the demand for housing, much like what happened in the last housing crisis.

To get more predictions for the 2022 housing market, visit Team Prehoden at our office in Encinitas, California. You can call 858-217-5400 today to schedule an appointment.