No One Saw It Coming: How a Housing Market Curveball Has Completely Changed What Buyers Can Expect in 2022
No One Saw It Coming: How a Housing Market Curveball Has Completely Changed What Buyers Can Expect in 2022
Abstract
Realtor.com expects home prices and mortgage rates will continue to rise, home sales will drop as buyers are priced out of homeownership, and the housing market will continue to cool. In a bright spot for frustrated homebuyers, the number of homes on the market is expected to shoot up. "More homes for sale will help bring back more balance and sanity to the market." Mortgage rates are now anticipated to hit 5.5% by the end of the year-a rate expected to continue sidelining buyers already grappling with record-high home prices. "It's causing buyers to make tough trade-offs and disrupting the housing market." The nearly 2 percentage point difference between the initial low prediction and the actual mortgage rate increase is a game changer for the housing market A median-priced home of $447,000 with a 3.6% mortgage rate would command a roughly $1,626 monthly mortgage payment. "Our home price projection is going up as we're seeing a lot of sticking power in prices and price growth," says Hale. "We do still expect home prices to cool, but we're starting at a higher price point." Those budget-busting rates and prices are expected to slow home sales. "So we've got a long way to go to catch up. That's why we could still see construction increase even if home sales slow." Home sellers will also likely need to adjust their expectations as they may not receive the windfall they expected.