Will the crazy housing market of 2021, with double-digit price gains across the country and record new and existing home sales, be less crazy in 2022? Probably, according to the National Association of Realtors.
While it says omicron is the wild card for what will happen for home sales this year, the market will remain strong but settle down to closer-to-normal levels. Its forecast is for median price gains by the end of 2022 of 5% to 7%.
Mortgage rates will go up this year after hitting historical lows during the pandemic. But not much.
The forecast for 30-year fixed rates by year’s end?
“For this year, 3.7%. But that is still historically low, and about the same as rates averaged in 2019,” said Gay Cororaton, director of housing and commercial research at the National Association of Realtors.
“We will continue to see interest rates rise in 2023. If you are thinking about buying a home, rates will be lower in 2022 than they will be in 2023. So, why wait,” she said.
For the D.C. metro, which saw many neighborhoods and jurisdictions set record highs for prices, and aggressive bidding wars among potential buyers, there will be the typical every-other-year bump in sales this fall. Elections tend to do that.
“I think D.C. being right in the middle of the political scene will always benefit from this increased demand from people in the political arena,” Cororaton said.
Nationwide, NAR expects the inventory crunch that has plagued the housing market will ease in 2022, with more sellers and with more new construction. And skyrocketing building costs, which builders have passed on to buyers, to ease along with a recovery in the supply chain of building materials.