Will there be a housing market correction in 2022 after two years of ‘hyper-growth’?
“Home sales are likely to be slightly lower in 2022 from the anticipated rise in mortgage rates. Home prices, meanwhile, will continue to rise due to the ongoing housing shortage even as demand is clipped a bit,” said Lawrence Yun, chief economist with the National Association of Realtors (NAR), who oversees NAR’s research group.
Their comments come after one of the hottest and craziest stretches in real estatedriven by a pandemic that has fueled demand for bigger houses as more Americans work from home. The frenzied buying has also been propelled by historically low mortgage rates and millennials (as many as 45 million, according to Realtor.com) trying to purchase their first house.
Last year the median price of an existing single-family home jumped to an all-time high of $357,900, up 23% from a year earlier, according to the NAR. About 94% of 183 metropolitan areas that were measured notched double-digit gains, up from 89% from the previous year, the organization said.
As for home sales this year, the market will remain strong, experts say, but resemble closer-to-normal levels.
Mortgage rates will go up this year after hitting historical lows during the pandemic, but not by much, Yun said. The NAR thinks it will be around 3.7%, compared to 3.4% currently. That’s still historically low.
The region, including Texas hotspots Austin, Dallas-Forth Worth and Houston, will continue to represent more than half of all new single-family homes built in the U.S.
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