SANTA CLARA, Calif.,
Dec. 1, 2021 /PRNewswire/ --
Americans will have a better chance to find a home in 2022, but
will face a competitive seller's market as first-time buyer demand
outmatches the inventory recovery, according to the
Realtor.com® 2022 Housing Forecast. Additionally, with
listing prices, rents and mortgage rates all expected to climb
while incomes rise, 2022 will present a mixed bag of housing
affordability challenges and opportunities.
"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."
Realtor.com® forecasts strong 2022 home sales and
competition, as first-time buyers overwhelm recovering inventory
levels
Realtor.com® forecasts 2022 home sales (+6.6%
year-over-year) will hit their highest level in 16 years as buyers
remain active and for-sale inventory begins to recover from recent
steep declines. 2022 buyers will face a competitive seller's
market, with record-high listing prices, fast-paced sales and
limited for-sale home options as existing-home listings continue to
lag behind pre-COVID levels. The new construction supply gap of 5.2
million new homes may shrink somewhat in 2022 as builders continue
to ramp up production with a projected increase of 5%
year-over-year.
With prospective sellers planning to increasingly enter the
market this winter, Americans can look forward to more
opportunities to make a successful home purchase. Affordability
will be a growing consideration as mortgage rates and home prices
rise, but a growing economy, strong employment market and workplace
flexibility will enable more home shoppers to successfully buy
their first homes without breaking their budgets. Additionally,
with rents forecasted to grow at a faster annual pace (+7.1%) than
for-sale home prices (+2.9%) in 2022, homebuying may become the
more affordable option, when compared to renting, in many markets.
Despite the challenging market, the homeownership rate is expected
to grow slightly in 2022 (65.8%).
Metric
(National)
|
2022
Realtor.com® Forecast
|
2021
Realtor.com® Housing
Data Expectations
|
Existing Home
Sales
|
+6.6%
year-over-year
|
6.0
million
|
Existing Home
For-Sale Inventory
|
+0.3%
year-over-year
|
-18%
year-over-year
|
Existing Home Median
Sales Price Appreciation
|
+2.9%
year-over-year
|
+12%
year-over-year
|
Rent
Growth
|
+7.1%
year-over-year
|
+8%
year-over-year
|
Mortgage
Rates
|
3.3% (avg); 3.6%
(year-end)
|
3.0% (avg); 3.2%
(year-end)
|
Single-Family Housing
Starts
|
Up 5% over
2021
|
+15%
year-over-year
|
Homeownership
Rate
|
65.8%
(year-end)
|
65.5% (annual
average)
|
2022 housing trends reflect new homebuying opportunities
combined with the past decade of growing challenges
- Millennials fuel fierce first-time buying competition for
limited inventory through 2025: Millennial housing demand has been
rising for years, but the pandemic ignited a first-time buying
frenzy as the decade-long housing shortage converged with new
opportunities for young buyers to pursue their first homes. Recent
survey data shows millennials account for over half (53%) of
prospective buyers who plan to purchase their first home within the
next year. Despite positive signs of inventory's return to growth
in 2022, this first-time buyer demand is expected to outmatch both
new and existing-home inventory. As a result, home shoppers will
face fierce competition in 2022 – and for at least the next three
years as millennials finish their first time buying years, the
relatively smaller Gen Z population increasingly enters the housing
market, and more older Americans begin downsizing for
retirement.
- Housing affordability issues will be a mixed bag: While
historically-low mortgage rates helped buyers better manage monthly
housing costs in 2021, affordability will be an important
consideration in 2022 as mortgage rates climb and home prices
continue to rise 2.9%. However, a number of factors will help keep
homeownership in reach for many buyers, including expected income
growth of 3.3% by year end and declining unemployment, expected to
drop from a projected 4.8% in the last three months of 2021 to 3.5%
during the same time period in 2022. Additionally, with rental
prices expected to surge in 2022 as they catch-up from
below-average growth seen during COVID, many markets may offer more
affordable monthly first-time buying costs relative to rents.
- Shifting workplace dynamics create new homebuying
opportunities: From workplace flexibility to higher incomes, 2022
will see employees call the shots on issues that will play an
increasingly important role in the housing market. As the economy
grows and unemployment declines, bigger paychecks will enable
buyers to compete even as housing costs rise, while more power to
negotiate flexible workplace arrangements will allow home shoppers
to explore lower-priced housing markets further from expensive city
centers. In fact, recent survey data shows nearly one-in-five
prospective sellers (19%) are looking to move because they no
longer need to live near the office, up from just 6% in the
spring.
- COVID compounds demand for more space – both inside and outside
the home: Demand for more space has been a consistent trend
throughout the pandemic and one that is expected to carry into
2022. With the number of Realtor.com® viewers of
suburban home listings rising 42.1% since the onset of COVID, the
suburbs will continue to be more popular than big urban metros as
home shoppers search for relatively affordable and larger homes.
Recent data suggests builders will account for buyer preferences
for more space in their 2022 production plans as new single-family
homes have begun to get larger. However, with demand expected to
outpace new construction growth and the typical 2,000 square foot
single-family home price still rising at a double-digit annual pace
in October (+16.7%), buyers may have to sacrifice extra space in
order to afford a home in their desired area.
- Homeowner diversity will play an increasingly important role in
the market: With U.S. demographic diversity increasing in younger
generations, populations like Hispanic Americans will play a
growing role in the 2022 housing market. Although they are
underrepresented among homebuyers relative to their share of the
population, the number of hispanic home shoppers is rising at a
faster pace than non-Hispanics. Additionally, as the majority of
new hispanic homeowners fell in the critical first-time buyer
category, the population will increasingly drive housing demand and
impact the homeownership rate in 2022 and beyond.
"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®. "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. The good news is that sites like
Realtor.com® provide more advanced digital real estate
tools than ever before, including personalized matching to
high-quality real estate agents in your local area, to help you
chart the best path forward for you and your family."
Homebuyers can use Realtor.com® tools like its
affordability calculator to get a sense of how much they can afford
in the 2022 housing market, as well as the
Realtor.com® app to set up personalized searches
and price alerts on new listings matching their criteria.
Additionally, sellers can use Realtor.com® resources
like My Home and Seller's
Marketplace to explore multiple home valuations, instant offers
from Opendoor, the Knock Home Swap™ for those buying a next home at
the same time, and more.
Realtor.com® 2022 Housing Forecast –
100 Largest U.S. Metros (in alphabetical order)
Metro
|
Forecasted 2022
Home
Sales Change (% Y/Y)
|
Forecasted 2022
Home
Price Change (% Y/Y)
|
Akron,
Ohio
|
11.4%
|
4.5%
|
Albany-Schenectady-Troy, N.Y.
|
-0.9%
|
4.0%
|
Albuquerque,
N.M.
|
3.9%
|
4.4%
|
Allentown-Bethlehem-Easton, Pa.-N.J.
|
4.0%
|
4.3%
|
Atlanta-Sandy
Springs-Roswell, Ga.
|
10.0%
|
3.5%
|
Augusta-Richmond
County, Ga.-S.C.
|
3.5%
|
4.1%
|
Austin-Round Rock,
Texas
|
4.7%
|
3.0%
|
Bakersfield,
Calif.
|
-4.2%
|
6.1%
|
Baltimore-Columbia-Towson, Md.
|
-2.4%
|
3.2%
|
Baton Rouge,
La.
|
-1.8%
|
1.5%
|
Birmingham-Hoover,
Ala.
|
8.1%
|
5.6%
|
Boise,
Idaho
|
12.9%
|
7.9%
|
Boston-Cambridge-Newton, Mass.-N.H.
|
3.9%
|
7.5%
|
Bridgeport-Stamford-Norwalk, Conn.
|
0.7%
|
2.5%
|
Buffalo-Cheektowaga-Niagara Falls, N.Y.
|
4.3%
|
4.5%
|
Cape Coral-Fort
Myers, Fla.
|
-5.6%
|
2.7%
|
Charleston-North
Charleston, S.C.
|
2.7%
|
4.6%
|
Charlotte-Concord-Gastonia, N.C.-S.C.
|
9.9%
|
5.6%
|
Chattanooga,
Tenn.-Ga.
|
3.7%
|
6.9%
|
Chicago-Naperville-Elgin, Ill.-Ind.-Wis.
|
-2.6%
|
1.9%
|
Cincinnati,
Ohio-Ky.-Ind.
|
7.9%
|
5.4%
|
Cleveland-Elyria,
Ohio
|
7.8%
|
4.2%
|
Colorado Springs,
Colo.
|
10.3%
|
5.2%
|
Columbia,
S.C.
|
6.4%
|
5.1%
|
Columbus,
Ohio
|
13.7%
|
6.3%
|
Dallas-Fort
Worth-Arlington, Texas
|
8.3%
|
4.0%
|
Dayton,
Ohio
|
10.7%
|
4.3%
|
Deltona-Daytona
Beach-Ormond Beach, Fla.
|
0.6%
|
6.1%
|
Denver-Aurora-Lakewood, Colo.
|
6.0%
|
5.0%
|
Des Moines-West Des
Moines, Iowa
|
5.9%
|
3.9%
|
Detroit-Warren-Dearborn, Mich
|
6.3%
|
5.6%
|
Durham-Chapel Hill,
N.C.
|
8.9%
|
4.2%
|
El Paso,
Texas
|
10.6%
|
5.1%
|
Fresno,
Calif.
|
3.7%
|
5.9%
|
Grand Rapids-Wyoming,
Mich
|
6.6%
|
7.1%
|
Greensboro-High
Point, N.C.
|
6.6%
|
5.3%
|
Greenville-Anderson-Mauldin, S.C.
|
11.4%
|
5.7%
|
Harrisburg-Carlisle,
Pa.
|
4.4%
|
3.5%
|
Hartford-West
Hartford-East Hartford, Conn.
|
-2.9%
|
0.7%
|
Houston-The
Woodlands-Sugar Land, Texas
|
2.6%
|
2.4%
|
Indianapolis-Carmel-Anderson, Ind.
|
14.8%
|
5.5%
|
Jackson,
Miss.
|
4.7%
|
3.5%
|
Jacksonville,
Fla.
|
6.2%
|
6.5%
|
Kansas City,
Mo.-Kan.
|
11.0%
|
4.7%
|
Knoxville,
Tenn.
|
3.3%
|
5.9%
|
Lakeland-Winter
Haven, Fla.
|
6.5%
|
7.0%
|
Las
Vegas-Henderson-Paradise, Nev.
|
0.1%
|
5.9%
|
Little Rock-North
Little Rock-Conway, Ark.
|
6.7%
|
3.4%
|
Los Angeles-Long
Beach-Anaheim, Calif.
|
-1.6%
|
4.8%
|
Louisville/Jefferson
County, Ky.-Ind.
|
7.3%
|
4.5%
|
Madison,
Wis.
|
6.2%
|
3.9%
|
McAllen-Edinburg-Mission, Texas
|
5.9%
|
5.1%
|
Memphis,
Tenn.-Miss.-Ark.
|
7.4%
|
6.6%
|
Miami-Fort
Lauderdale-West Palm Beach, Fla.
|
3.6%
|
5.8%
|
Milwaukee-Waukesha-West Allis, Wis.
|
10.5%
|
2.4%
|
Minneapolis-St.
Paul-Bloomington, Minn.-Wis.
|
4.1%
|
6.0%
|
Nashville-Davidson--Murfreesboro--Franklin,
Tenn.
|
5.5%
|
5.6%
|
New Haven-Milford,
Conn.
|
-1.8%
|
1.0%
|
New Orleans-Metairie,
La.
|
0.7%
|
5.0%
|
New
York-Newark-Jersey City, N.Y.-N.J.-Pa.
|
-3.0%
|
2.3%
|
North
Port-Sarasota-Bradenton, Fla.
|
0.8%
|
1.7%
|
Oklahoma City,
Okla.
|
3.7%
|
2.6%
|
Omaha-Council Bluffs,
Neb.-Iowa
|
8.2%
|
4.9%
|
Orlando-Kissimmee-Sanford, Fla.
|
8.8%
|
5.4%
|
Oxnard-Thousand
Oaks-Ventura, Calif.
|
-2.2%
|
4.4%
|
Palm
Bay-Melbourne-Titusville, Fla.
|
7.4%
|
7.9%
|
Philadelphia-Camden-Wilmington,
Pa.-N.J.-Del.-Md.
|
4.7%
|
2.9%
|
Phoenix-Mesa-Scottsdale, Ariz.
|
7.5%
|
6.8%
|
Pittsburgh,
Pa.
|
8.3%
|
3.5%
|
Portland-South
Portland, Maine
|
-0.2%
|
10.0%
|
Portland-Vancouver-Hillsboro, Ore.-Wash.
|
6.1%
|
4.3%
|
Providence-Warwick,
R.I.-Mass.
|
8.1%
|
9.5%
|
Raleigh,
N.C.
|
9.6%
|
4.3%
|
Richmond,
Va.
|
5.0%
|
4.9%
|
Riverside-San
Bernardino-Ontario, Calif.
|
-1.4%
|
5.5%
|
Rochester,
N.Y.
|
8.3%
|
4.0%
|
Sacramento--Roseville--Arden-Arcade,
Calif.
|
6.0%
|
5.0%
|
St. Louis,
Mo.-Ill.
|
6.8%
|
1.7%
|
Salt Lake City,
Utah
|
15.2%
|
8.5%
|
San Antonio-New
Braunfels, Texas
|
5.1%
|
3.5%
|
San Diego-Carlsbad,
Calif.
|
0.2%
|
4.8%
|
San
Francisco-Oakland-Hayward, Calif.
|
-5.2%
|
5.5%
|
San
Jose-Sunnyvale-Santa Clara, Calif.
|
-4.0%
|
4.2%
|
Scranton--Wilkes-Barre--Hazleton, Pa.
|
3.6%
|
1.1%
|
Seattle-Tacoma-Bellevue, Wash.
|
9.6%
|
7.5%
|
Spokane-Spokane
Valley, Wash.
|
12.8%
|
7.7%
|
Springfield,
Mass.
|
6.1%
|
6.6%
|
Stockton-Lodi,
Calif.
|
1.0%
|
7.8%
|
Syracuse,
N.Y.
|
5.7%
|
4.4%
|
Tampa-St.
Petersburg-Clearwater, Fla.
|
9.6%
|
6.8%
|
Toledo,
Ohio
|
11.0%
|
2.4%
|
Tucson,
Ariz.
|
8.0%
|
6.2%
|
Tulsa,
Okla.
|
0.8%
|
1.8%
|
Urban Honolulu,
Hawaii
|
-3.9%
|
0.2%
|
Virginia
Beach-Norfolk-Newport News, Va.-N.C.
|
11.8%
|
2.7%
|
Washington-Arlington-Alexandria, DC-Va.-Md.-W.
Va.
|
5.6%
|
3.8%
|
Wichita,
Kan.
|
7.4%
|
6.3%
|
Winston-Salem,
N.C.
|
5.9%
|
5.8%
|
Worcester,
Mass.-Conn.
|
8.4%
|
8.2%
|
Youngstown-Warren-Boardman, Ohio-Pa.
|
7.3%
|
6.9%
|
Methodology
Realtor.com®'s model-based forecast uses data
on the housing market and overall economy to estimate values for
these variables in the year ahead.
About Realtor.com®
Realtor.com® makes buying, selling, renting and
living in homes easier and more rewarding for everyone.
Realtor.com® pioneered the world of digital real estate
more than 25 years ago, and today through its website and mobile
apps offers a marketplace where people can learn about their
options, trust in the transparency of information provided to them,
and get services and resources that are personalized to their
needs. Using proprietary data science and machine learning
technology, Realtor.com® pairs buyers and sellers with
local agents in their market, helping take the guesswork out of
buying and selling a home. For professionals,
Realtor.com® is a trusted provider of consumer
connections and branding solutions that help them succeed in
today's on-demand world. Realtor.com® is operated by
News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move,
Inc. For more information, visit Realtor.com®.
Media Contact
rachel.conner@move.com
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