From remote work trends impacting where people can live to affordability issues cropping up as home prices rise, the real estate markets in 2022 will have a fair share of new challenges and opportunities. According to the realtor.com® 2022 Housing Forecast, next year is set to be a mixed bag.
Housing trends to watch in 2022:
- While 2020-2021 brough a home-buying frenzy largely fueled by first-time millennial homebuyers, potential homeowners will face increased competition for at least the next three years.
- Affordability will be a mixed bag as mortgage rates continue to climb and home prices rise. Realtor.com® expects income to grow 3.3% by year end and unemployment to continue declining from a projected 4.8% in the last three months of 2021 to 3.5% during the same time period in 2022.
- Workplace flexibility and higher incomes may give employees the advantage in 2022 with one-in-five prospective sellers (19%) looking to move because they no longer need to live near the office—an increase from 6% in the spring.
- The suburbs will become increasingly popular compared to big urban metros as home shoppers search for more space—a trend brought on by the pandemic. However, as demand is expected to outpace new construction growth, buyers may have to sacrifice space due to affordably constraints.
- Hispanic homeownership is predicted to rise in 2022, driving housing demand and impacting the homeownership rate for years to come.
“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 in a statement. “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.”
“Our Housing Forecast suggests that we’re in store for another dynamic year of activity, but 2022 will also come with growing pains as we navigate the path forward from the height of the pandemic toward a new normal,” said George Ratiu, manager of Economic Research for realtor.com®, in a statement. “With most real estate markets expected to be competitive in 2022, it’s important to remember that you’re in the driver’s seat of your real estate journey. The bottom line for buyers is to make sure you’re comfortable with your timeline and budget—and especially for younger buyers making this massive financial decision for the first time. For sellers, take into account your local market conditions as well as the likely increase in the number of homes for sale, and price yours competitively.”
Liz Dominguez is RISMedia’s senior online editor. Email her your real estate news ideas to [email protected].