The predictions we are seeing indicates the market will change slightly from last year.
The year will begin with the lowest inventory by far since 2004. With very few available homes to purchase, housing will be extremely hot on January 1. The theme will be: "not enough homes for buyers to purchase." Expect the inventory to peak around August.
With an anemic inventory and continuing low mortgage rates, buyer demand will be extremely strong, from the start of the year, through the summer market. Demand will be at its strongest, and most appreciation will occur from January through July, and then it will downshift during the autumn and holiday markets.
The market will regain a little balance, but it will remain a seller's market. With buyer competition, buyers will be willing to stretch slightly in price compared to most recent sales; so expect appreciation of around 6% to 8% for the year.
The number of successful, closed sales will drop slightly by 3-5% compared to 2021.
Luxury sales will continue to improve slightly year over year and surpass 2021‘s record level by 3-5%. The spring market will be the strongest for luxury and will become a bit more sluggish from about August on.
Look for mortgage rates to continue to remain at low levels. Expect interest rates to rise from the record low levels.
The housing market will follow a normal housing cycle. The strongest demand, coupled with fresh inventory, will occur during the spring market. This will be followed by slightly less demand and a continued new supply of homes in the summer market. From there demand will drop further, along with new supply in the autumn market, until finally slowing down in the holiday market.
The Bottom Line
2022 will continue where the second half of 2021 left off, HOT. It will be a Seller's market from the start of the year through the Summer market. Once again, the market will favor sellers, and buyers will have to pack their patience and take advantage of low-interest rates.