Housing Preview: 2022 Will Bring a Continued Rise in Home Sales and Prices, Report Says
Anyone in the market for a new house should have a slightly better shot at finding one next year as the supply of new homes inches closer to demand, but you can still expect historically high prices pretty much everywhere, according to a new report from Realtor.com.
The company’s 2022 Housing Forecast, released on Wednesday, Dec. 1, predicts that year-over-year home sales in the United States will rise 6.6% in 2022 to their highest point in 16 years. Sales will be driven in part by an improvement in the amount of home inventory on the market, as single-family housing starts are expected to rise 5% in 2022 on top of a 15% gain in 2021.
Median home prices are expected to climb 2.9% next year — a much lower gain than in 2021, when prices shot up an estimated 12%. It will still be very much a seller’s market in 2022, though buyers will have a little more opportunity than they did this year.
“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,” Realtor.com Chief Economist Danielle Hale said in a press release. “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.”
The COVID-19 Omicron variant could throw a wrench into things if the U.S. is forced to implement restrictions similar to those that were put in place when the pandemic first hit. For now, the pandemic’s main impact has been contributing to higher demand for more space — which has been a boon to suburban markets. The number of Realtor.com users viewing suburban homes has risen 42.1% since the onset of COVID-19.
“The suburbs will continue to be more popular than big urban metros as home shoppers search for relatively affordable and larger homes,” Realtor.com said.
An analysis of the 100 biggest U.S. metro areas revealed that all of them should see higher home prices in 2022. Some price hikes will be minimal — less than 1% in Honolulu and Hartford, Connecticut, for example. But many will be pretty steep, especially in Portland, Maine (a 10% projected price gain); Providence, Rhode Island (9.5%); Salt Lake City, Utah (8.5%); Worcester, Massachusetts (8.2%); Boise, Idaho (7.9%); and Palm Bay-Melbourne-Titusville, Florida. (7.9%).
Most markets should also see an uptick in home sales. Here are the housing markets projected to see a double-digit sales gain in 2022:
- Akron, Ohio (up 11.4% year over year)
- Atlanta (10.0%)
- Boise, Idaho (12.9%)
- Charlotte, N.C. (9.9%)
- Colorado Springs, Colo. (10.3%)
- Columbus, Ohio (13.7%)
- Dayton, Ohio (10.7%)
- El Paso, Texas (10.6)
- Greenville, S.C. (11.4%)
- Indianapolis (14.8%)
- Kansas City, Miss. (11.0%)
- Milwaukee (10.5%)
- Salt Lake City (15.2%)
- Spokane, Wash. (12.8%)
However, not all markets will see sales increase. Housing markets that could turn ugly in 2022 with lower sales include Cape Coral-Fort Myers, Florida.; San Francisco and San Jose, California; Honolulu; and New York.
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