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A Look At The Current Real Estate Market (Spring/Summer 2022)

At HomeLight, our vision is a world where every real estate transaction is simple, certain, and satisfying. Therefore, we promote strict editorial integrity in each of our posts.

2020 and 2021 were a wild ride for buyers, sellers, and real estate agents navigating the real estate market in the midst of a pandemic, skyrocketing home prices, persistent inadequate new housing construction, and rapid inflation. So how is the current real estate market of 2022 different, if at all? Let’s take a look at current market conditions, including economic indicators affecting it, plus what may be coming in the second half of 2022 — and what it all means practically for today’s homebuyers and sellers.

Current market conditions

Prices continue to increase — albeit more slowly than before

As of April 2022, the U.S. has seen a record-setting 122 consecutive months of year-over-year median price increases on sales of existing homes.

The median existing-home price was $391,200 in April — a 14.8% increase from April 2021. For perspective, the median existing-home price for 2019 was $271,900.

Prices of newly-built houses are even higher, with the median price for a new house as of April 2022 of $450,600, up from $376,600 in April 2021.

However, the market may finally be starting to level off. In the first four months of 2022, the monthly existing-home sales median price year-over-year increase has been, on average, 15.2%, according to data from the National Association of Realtors® (NAR). In other words, the rate of increase has slowed. Those increases are down from, for example, an 23.6% increase between May 2020 and May 2021 and from a 23.2% increase between June 2020 and June 2021.

Real estate agents anticipate this situation to prevail in 2022. According to agents surveyed for HomeLight’s 2022 Top Agent Insights Housing Market Preview report, respondents generally anticipated continuing favorable conditions for homesellers, while market balancing begins to offer more opportunities for homebuyers.

Sales are slowing

The first two quarters of 2022 have also brought slower sales. As the NAR reports, “Existing-home sales fell for the third straight month in April 2022, to a seasonally adjusted annual rate of 5.61 million.” This is a 2.4% drop from the month before and a 5.9% decrease from April 2021.

New home sales have slowed even more significantly. For April 2022, the Census Bureau reported a 26.9% drop in new home sales year-over-year and a 16.6% drop compared to the prior month.

Trends vary by region

Although the U.S. housing market is starting to cool nationally, current real estate market conditions do vary somewhat by region.


Existing-home sales in the Midwest are not slowing as rapidly as they are in the Northeast, West, and the South, possibly reflecting that region’s status as one of the most affordable areas in the country to buy a home.

New home sales have decreased more rapidly, however, dropping 25.5% year-over-year between April 2021 and April 2022.

The median sales price of an existing home in the Midwest in April 2022 was $282,000, an 8.7% increase from $259,400 in the same month of 2021.


Prices in the South continue to rise more rapidly than in the other regions. For 8 months in a row, according to NAR data, “the South recorded the highest pace of price appreciation in comparison to the other three regions. Additionally, the South is the only region to report year-over-year double-digit price gains.”

The median sales price of an existing home in the South as of April 2022 was $352,100, which is a 22.2% year-over-year increase. Meanwhile, existing-home sales were down 5.7% from the year before.

Sales of newly-built Southern homes show a 36.6% decrease year-over-year. Nevertheless, as of April 2022, the South boasted more new home sales year-to-date (144,000) than the other three regions combined.


The Northeast region has seen the largest decrease in existing home sales, with a 10.7% drop year-over-year between April 2021 and April 2022.

The median existing-home price in the Northeast increased more modestly from April 2021 to April 2022 than it did in the Midwest and the South. Existing homes sold for a median price of $412,100, an 8.1% increase year-over-year.

The Northeast is the only region where sales of newly-built homes actually increased between April 2022 and April 2021, showing a 17.1% spike year-over-year and a 6.5% increase year-to-date compared with 2021. Regardless, total sales of new homes in the Northeast tend to be drastically lower than in every other region.


The West showed the smallest increase in median existing-home prices year-over-year in April 2022 — only up 4.3% over 2021. The median price as of April 2022 was $523,000, compared with $502,000 for all of 2021. In 2019, the median existing home price in the West was $400,900.

Sales of existing homes in the West were also down 8.1% in April 2022, compared with the previous year, while sales of new homes were down 12.4%.

Economic indicators affecting the 2022 real estate market

The housing market is, of course, only one piece of an ever-changing economic lanscape, and its contours depend on adjacent pieces — intertwined factors like inflation, housing inventory, and mortgage rates. Let’s take a look at these indicators to understand how they are shaping the current real estate market and how these may affect the second half of 2022.


Inflation is a measure of how prices change over time for goods and services people purchase. A certain level of inflation is expected and even healthy in a given year. (The Federal Reserve aims for 2% per year.)

However, between April 2021 and April 2022, the Consumer Price Index (CPI) — the most common way to measure inflation — went up by 8.3%. During that time, prices for food alone rose by 10.8% (at home) and 7.2% (away from home) — year-over-year increases the United States hasn’t seen since 1981.

Energy prices have also risen steeply in the early months of 2022, with a 34.6% increase in the energy index between May 2021 and May 2022.

When such rapid inflation occurs, that puts the squeeze on the average consumer’s wallet and can make a large purchase like a house more difficult.

Housing inventory

Housing inventory continues to be scarce. Although new residential construction may actually be improving, there are simply more buyers than homes available, which continues to drive home prices higher and keep them there.

Supply still cannot keep up with demand. According to the Realtors® Confidence Index Survey from April 2022, Realtors® reported almost 6 offers per home sale in March 2022, compared with 5.1 offers per sale in March 2021.

On a positive note, since the third quarter of 2020, the number of new homes built for sale (rather than built by owners) has seen a significant uptick, according to U.S. Census Bureau data on new residential construction. In 2019 and the first 2 quarters of 2020, the United States saw an average of 167,300 new residential housing starts (built for sale) each quarter. That average for the second half of 2020 through the first quarter of 2022 is 217,600 starts.

Nevertheless, even with cooling home sales, demand has still been outpacing that new construction.

Mortgage rates

Mortgage rates are also on the rise. As of the week of May 26, Freddie Mac reports the current average interest rate on a 30-year fixed-rate loan to be 5.10%. That 30-year rate is up from an average commitment rate of 3.06% interest in April of 2021.

While these numbers may sound high, they’re still historically low. For perspective, according to 50 years of data from Freddie Mac, the average annual interest rate on a 30-year fixed loan for the 1970s was 9.03%. In the 1980s, that average was 12.70%. In the 1990s, it was 8.12%. In the 2000s, it was 6.29%, and in the 2010s, it was 4.09%.

Combined with historically high home prices, recent inflation, and low inventory, however, these mortgage rate increases are certainly contributing to a tough market for buyers.

What’s next? Projections for 2022

We’ve covered a lot of data concerning the early 2022 market as it stands. But where might it be going from here?

Prices are still rising

Experts believe that home prices will stay high for now. Lawrence Yun, NAR Chief Economist, says lack of inventory will continue to be a problem, which will likely keep home prices high. Many agents on the ground agree. In HomeLight’s Spring 2022 Top Agents Insights Report, 85% of the 1,134 top agents we surveyed say home prices are still on the rise in their market, up from 59% the previous quarter. In addition, 53% say bidding wars are at their peak, compared to 42% who said the same one year ago.

Still a seller’s market

Demand may cool but is not likely to plummet. And with the reality of continued underproduction of housing, the law of supply and demand says we’ll still have more buyers than houses for sale. An incredible 98% of agents surveyed by HomeLight continue to describe their local markets as seller’s markets. In addition, 52% of them say that cash offers in their markets were increasing over the previous quarter.

And while rising mortgage rates will likely deter some buyers, 55% of the agents we polled for our Spring 2022 Top Agents Insights Report say that they are not seeing buyers start to drop out due to rising interest rates.

What should you do?

As we’ve seen, the 2022 real estate market has been and will likely continue to be a seller’s dream — and competitive and challenging for buyers. Here are some tips for each group to help navigate this market.

Tips for buyers in 2022

  • If you have flexibility, expand your search area to more affordable regions. Try this tool from the NAR to help check out affordability in a specific state or metropolitan area.
  • Press pause on your “forever home” and embrace a fixer-upper. According to our Top Agents Insights Report, 57% of agents today say that buyers should expect starter homes in their market to need some work, versus 20% two years ago.
  • Don’t compromise on a pre-purchase inspection. You’ll be in a much worse place if you pay a very high price for a house that is full of problems.
  • Get creative with your offers. In HomeLight’s Buyers and Seller Insights Report, we found that in order to make their offers more appealing to sellers, 23% of buyers altered their closing timeline to fit the seller’s preferences, 22% of buyers decided to put down extra funds beyond their initial down payment, and 22% asked for no repairs. Less common, still creative options involved including a price escalation clause in the offer (14%) or including a personal message or letter to the seller (12%).
  • To get a lower interest rate — if you know you’re not going to stay in the home for less than 5 years — consider a 5-year adjustable-rate mortgage.
  • If you live in Arizona, California, Colorado, Florida, or Texas, check out our HomeLight Cash Offer or HomeLight Trade-In. HomeLight can make an all-cash offer on your behalf, which is 3 times more likely to win a bidding war; or with HomeLight Trade-In, we can make you an offer on your current home, taking the uncertainty out of buying and selling at the same time.

Tips for sellers in 2022

Even in a seller’s market, you’d still be wise to follow these best practices and up-to-date agent advice so you can have a successful, smooth transaction.

  • Work with a top agent to guide you along the way. We’d love to connect you to someone with a track record of satisfied clients. Our service is completely free, and in two minutes, we’ll recommend the best agents near you.
  • Plan your exit strategy. In our Buyers and Seller Insights Report, we found that 10% of sellers sold their homes without knowing where they would live next. 19% of sellers nationally planned to live with friends or family while they searched for their next home.
  • Emphasize any RV parking, boat slips, or extra land in your marketing. Our top agents reported the estimated value a boat slip adds to a property in today’s market is $78,785, as opposed to $40,252 in March 2020 — while they estimated RV parking adds $15,030 as opposed to $7,754 in March 2020. Space for “toys” and space to play have become increasingly valuable to buyers in a post-pandemic market.
  • If you’d rather not go through the work of listing your house, consider requesting a cash offer from HomeLight’s Simple Sale platform, which provides cash offers for homes in almost any condition across the nation. You can skip repairs, staging, and showings. Instead, tell us a bit about your home and your selling timeline, and we’ll send over a cash offer in as few as 48 hours. With Simple Sale, you can also compare your offer to an estimation of what you’d fetch on the open market.

Header Image Source: (Chris Norberg / Unsplash)

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