Here are predictions on the strength of the 2022 housing market
Homebuyers and sellers are wondering if the market will continue its streak of growth or are things going to slow down? Based on supply and demand the data highlights the following variables that we should see in 2022:
Demand will stay strong
Days on Market indicates how fast homes are selling and all markets across the nation report less than a two month supply of inventory. A healthy market is approximately 6 months of supply so the numbers are well below the average. With homebuyer demand off the charts earlier this year, Altos Research has termed the phenomenon “immediate sales.” This is where offers happen more or less immediately after the home gets listed for sale.
Low inventory will continue to be a major issue
Unfortunately for all these eager homebuyers, inventory continues to be at record low levels. it’s normal for inventory to drop at this time of year, but it’s actually declining faster than expected, which indicates that we’ll start 2022 with record- low levels of available homes for sale, even less than in 2021. Home prices will remain high into 2022. With demand showing no signs of cooling and record-low inventory, I expect home prices to remain high into next year. The median home price for single family homes are up about 10% higher than last.
As we look towards 2022
All the leading indicators show tight inventory and strong demand keeping prices high — a strong seller’s market. That being said, keep an eye on rising interest rates. If interest rates start rising, and we’re seeing inflation or other economic challenges, this could have a cooling effect on the market. These variables aren’t in the data yet, but they’re looming. We’ll want to keep watching the data closely to spot any major shifts.