Housing Trends: US Home Prices Expected to Rise 13.6% Over Next Year, Zillow Estimates

Family with two boys (4 and 6 years) standing in front of house with FOR SALE sign in front yard.
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If you’re in the market to buy a new home, there’s some good news and some … okay,  there’s not a lot of good news. The bad news is this: A continued tight supply of available homes in the United States is likely to push prices up by double-digits over the next year following an even bigger gain in 2021.

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U.S. home values are forecast to rise 13.6% between October 2021 and October 2022, according to the latest estimates from Zillow Research. That’s on top of an expected 19.5% gain for all of 2021. Zillow sees existing home sales reaching 6.12 million units in 2021, up 8.5% from last year.

“The strong long-term outlook is driven by our expectations for tight market conditions to persist, with demand for housing exceeding the supply of available homes,” Zillow said on its website.

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The typical home value in the U.S. was $312,728 as of Oct. 31, Zillow noted. An average increase of 13.6% would move that figure up to around $355,000.

Near term, home values are expected to climb 3.8% in the three-month period from October to January 2022. That’s slightly lower than the 4.4% growth previously forecast for September to December, amid a recent slowdown in home value growth during the summer and early fall.

Even with the higher prices, some Americans still have incentive to purchase homes because of historically low interest rates.

“Though sharply rising home prices present affordability challenges for many, low mortgage rates continue to keep monthly payments manageable for those who can afford a down payment,” Zillow said.

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That might not last much longer, however. In terms of downside risks moving forward, Zillow cited the expiration of mortgage forbearance programs along with rising inflation, the latter of which “heightens the risk of near-term monetary policy tightening” and might result in higher mortgage rates.

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About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.

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