The Biggest Question for Homebuyers and Sellers: Will Home Prices Go Down in 2022?

February 4th, 2022 by Administrator
real estate

As the New Year – 2022 is about to start, everyone in the U.S. real estate market is wondering whether the prices of homes will go down in 2022 or not. It always makes sense to have such a question because it helps you learn – if you buy a home now, it will lose value or become more valuable in the future.  

Let’s put a full stop to all the mystery. There is good news for real estate investors and families looking forward to buying homes. According to experts, the prices of homes are not projected to decline in 2022. Why? Let’s find out.

Since homebuyers are still outnumbering home sellers, home prices are forecasted to not drop in 2022. On the contrary, home prices will continue to appreciate in 2022; however, at a slower pace. The only reason is the simple law of supply and demand. When the supply of homes is less than the number of buyers in the market, the competition to get their hands on homes naturally raises the price value of homes.

Another important trend to note is that the number of homes for sale today is expected to increase with more sellers listing their houses this winter. It means we will have sufficient inventory in 2022, which explains the reason behind the slow rate of appreciation in the value of homes.

Chief Economist Lawrence Yun at National Association of Realtors (NAR) said,

Slower growth in home prices, decelerating inflation, and multiple interest rate hikes by the Federal Reserve could contribute to a more normal housing market in the New Year”.

Stats Shared By Leading Real Estate Industry’s Experts in the U.S.:

Here are some figures shared regarding home price appreciation in 2022:

  • The CoreLogic HPI Forecast shows a year-over-year increase of about 2.5 percent.
  • forecasted appreciation of home prices by 2.9 percent.
  • Realtor Magazine published an increase of annual median home prices by 5.7 percent.
  • Fannie Mae and Freddie Mac predicted the US Home Price Growth by 7.9 percent and 7 percent, respectively.
  • The prediction made by Zillow has been far more surprising as it predicts an appreciation of 11 percent in the value of home price.

While you can see a significant difference in the appreciation of home prices forecasted by different industry experts, there is one thing that is common among them all. All of these predictions point toward the fact that the home prices will continue to appreciate in 2021 and they are not going to decline.

While this may show that housing affordability will remain a concern for many, it also indicates that investors and families that will buy homes now will not lose the value of their investment. Even though home prices in the U.S. real estate market won’t increase monumentally as they were in 2021, they will not decline soon certainly.

What does slow-paced home price appreciation mean for homebuyers?

With so many potential homebuyers in the market and fewer homes available for sale, there will be a continued appreciation of home prices in 2022. And the general rule of thumb is that when home prices are forecasted to increase, the decision to buy a home is a good one.

The next thing you should be aware of is the location where you want to buy. When you are looking at your home as an investment, it makes sense to buy a home in a place where growth is inevitable. So, before you decide to buy a home, stay updated about what’s going on in the real estate market nationally and locally to make an informed decision.