{"id":33060,"date":"2022-09-14T16:10:51","date_gmt":"2022-09-14T23:10:51","guid":{"rendered":"https:\/\/www.homelight.com\/blog\/?p=33060"},"modified":"2026-04-06T07:03:25","modified_gmt":"2026-04-06T14:03:25","slug":"real-estate-market-forecast-2022","status":"publish","type":"post","link":"https:\/\/www.homelight.com\/blog\/real-estate-market-forecast-2022\/","title":{"rendered":"2022 Real Estate Market Forecast: What’s Next?"},"content":{"rendered":"

The U.S. housing market is undergoing a rebalancing. Visit <\/i>HomeLight’s 2022 Housing Trends Hub<\/i><\/a><\/i> for information on how to navigate a shifting market \u2014 whether you’re a seller, buyer, or homeowner.<\/i><\/p>\n

If you\u2019re thinking about jumping into the real estate market in 2022, it may feel like the ground is shifting underneath your feet. And mixed messages have rumbled throughout the market to this point.<\/p>\n

So far, home prices are holding relatively steady \u2014 even as mortgage rates rise<\/a>. Demand hasn\u2019t collapsed, even as inflation pressures weigh down buyers<\/a>. Still, the housing market<\/a> is poised to shift throughout the rest of the year, and buyers or sellers who spot the market\u2019s direction now can gain more on their investments in the future.<\/p>\n

For this updated 2022 housing market forecast, we gathered insights from two market experts: Ken H. Johnson, Ph.D.<\/a>, a real estate economist and associate dean of graduate programs at Florida Atlantic University, and Kurt Buehler<\/a>, a top real estate agent who has been selling homes in the Dallas-Fort Worth area for more than 30 years.<\/p>\n

Here\u2019s how the experts see the real estate market changing in 2022<\/a>, and what those changes mean for buyers and sellers.<\/p>\n\n\n\n\n\n

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What to expect from the real estate market in 2022<\/h2>\n

As a buyer or seller, there may be a lot riding on the decisions you make throughout the rest of 2022. And housing experts see the real estate market moving throughout the next several months. Here are a few ways experts believe the real estate market could shift in 2022:<\/p>\n

Home prices should dim<\/h3>\n

High inflation<\/a>, recession fears, high mortgage rates<\/a>, and more should press home prices lower in 2022. However, that doesn\u2019t necessarily mean prices will drop significantly across the nation. Dr. Johnson expects housing prices to drop in low-demand areas, but he says that as people continue to flock to hot markets it should shield those regions from significant price declines.<\/p>\n

\u201cI think you\u2019ll get a bifurcated outcome,\u201d he says. \u201cSome parts of the country are going to [see prices drop] rather noticeably. Those declines are going to correlate with areas that have decreasing populations. I think, within the increasing population areas, growth is going to help sustain current prices.\u201d<\/p>\n

At this point in 2022, prices already appear to be pulling back in some areas. According to HomeLight\u2019s 2022 Fall Top Agents Insights survey<\/a>, 90% of agents say price reductions are happening more frequently within their markets in Q3 \u2013 a 56% increase from Q2.<\/p>\n

Mortgage rates will likely climb<\/h3>\n

Mortgage rates<\/a> have shot higher thus far in 2022. According to Fortune, mortgage rates streaked to 6.3%<\/a> in June, capping a more than 50% rise in just six months. During the summer, rates pulled back a bit, but they\u2019ve clawed their way higher recently. According to Mortgage News Daily, their index saw the average mortgage rate for a 30-day fixed mortgage<\/a> rise above 6% to open September.<\/p>\n

As Dr. Johnson points out, the upswing in mortgage rates could dampen home prices in 2022.<\/p>\n

\u201cThe mortgage market continues to surprise me,\u201d says Dr. Johnson. \u201cAnd depending on how the Fed fights inflation, we could see rates go even higher, which is going to put a little more downward pressure on the value of homes.\u201d<\/p>\n

Home values may dip<\/h3>\n

As high mortgage rates thin out buyers, it should depress home prices. That could reduce home values in most areas.<\/p>\n

\u201cI think we’re going to cycle into a neutral marketplace, and in some marketplaces, it’s going to be a buyer’s market,\u201d Buehler says. \u201cThat affects values.\u201d<\/p>\n

However, Buehler notes that housing appreciation<\/a> should fall back from recent sky-high levels. So lower home values doesn\u2019t necessarily mean long-term losses for homeowners.<\/p>\n

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What will drive market trends in the coming months?<\/h2>\n

Wondering what will propel real estate market trends<\/a> throughout the rest of 2022? Here are a few factors that may influence the housing market in the next few months:<\/p>\n

Population growth<\/b>: Dr. Johnson says he expects the housing market to fragment and shift based on local regions in 2022. He believes regional housing prices will bend with population.<\/p>\n

\u201cI think we\u2019re going to see significant declines in certain parts of the country in terms of housing prices, but those places are almost certainly going to be areas where they\u2019re having depopulation,\u201d he says.<\/p>\n

Inventory levels<\/b>: In areas where prices tick lower, buyers and sellers will likely run into a second factor: inventory levels<\/a>. Everything from construction costs<\/a> and local demand to city or state bureaucracy and more can affect housing inventory. So, inventory levels will vary by zip code. However, in places where shortages pop up, prices should find a floor to rest on.<\/p>\n

\u201cIn areas that have persistent inventory shortages, oddly enough, that will help support prices,\u201d explains Dr. Johnson. \u201cIf you\u2019re in an area that\u2019s already supply restrained, and you can\u2019t solve that problem, it\u2019s going to be hard for your prices to fall that much.\u201d<\/p>\n

Mortgage rates<\/b>: As mortgage rates climb, buying a home becomes more expensive. Stack high mortgage rates on top of historic inflation<\/a>, and high costs may be causing home buyers to back away from the housing market in 2022.<\/p>\n

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How fast will homes sell during the rest of 2022?<\/h2>\n

In recent years, homes have flown off the market at historic rates. According to a National Association of Realtors (NAR) report, homes only sat on the market for a median of 14 days before selling<\/a> earlier this year \u2014 an extremely short window for median days on market<\/a>. However, those rates appear to be slowing.<\/p>\n

A July NAR report saw home sales tumble 5.9% from the month prior. That marked six straight months where existing home sales fell. The same report showed June\u2019s home sales dropped by more than 20% from the year prior.<\/p>\n

It also appears that confidence in the housing market is nudging away from recent highs. Over the last two years, more than 90% of real estate agents consistently reported a seller\u2019s market in their area. However, in HomeLight\u2019s recent 2022 Fall Top Agent Insights survey<\/a> of more than 1,000 agents, only 51% are describing their current local market as a seller\u2019s market. Only three months earlier, that number stood at 95%. But even with this shift, the majority of agents surveyed are not yet convinced it\u2019s a buyer\u2019s market. Only 10% characterized their local market that way.<\/p>\n

Before homeowners panic, it\u2019s important to remember that home sales are falling off record highs<\/a>. Still, high inflation, rising mortgage rates, and economic uncertainty could all keep houses sitting on the market longer in 2022.<\/p>\n

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How will housing trends impact homebuyers and sellers?<\/h2>\n

With so much happening within the housing market, you\u2019re probably wondering, \u201cWill there be another housing market crash?\u201d Dr. Johnson says he doesn\u2019t expect the market to nosedive the way it did in the last housing crash<\/a>. However, he believes housing prices could inch lower in some areas.<\/p>\n

\u201cI\u2019m not going to be shocked if I wake up a year from now and see 10% price declines,\u201d explains Dr. Johnson. \u201cI am going to be shocked if I wake up and see 30% price declines like last time.\u201d<\/p>\n

Here are a few ways shifts in the 2022 market could affect buyers, sellers, renters, and homeowners:<\/p>\n

What home sellers can expect in 2022<\/h3>\n

If you\u2019re planning on selling your home in 2022<\/a>, you can expect a few outcomes that may impact your plans:<\/p>\n

Prices should relax<\/b>: The experts say they believe prices will cool down in the near future. That means you probably won\u2019t have the booming profits and bidding wars that your neighbors may have experienced in recent years.<\/p>\n

Hot markets may not fall much<\/b>: Even if local housing prices dip, some markets may not be dented much in 2022. Dr. Johnson says that if your local population is booming, that demand could catch price declines before they fall too far.<\/p>\n

\u201cSome areas are expecting a huge population influx, and I just don\u2019t think you\u2019ll see the tremendous decline in price there,\u201d explains Dr. Johnson. \u201cYou\u2019ll maintain wealth, so you don\u2019t have to worry about prices plummeting so much as a homeowner.\u201d<\/p>\n

Demand should slow<\/b>: Higher mortgage rates weigh down buyers, and they\u2019re likely to slow down demand within the real estate market. That all should cause sales and appreciation to calm down. As Dr. Johnson notes:<\/p>\n

\u201cYou can\u2019t go from 3%, 30-year financing to 5%, 30-year financing and not see it impact housing prices. As far as double-digit appreciation, which was very much influenced by low mortgage rates, those days are over.\u201d<\/p>\n

\n Now, all of a sudden, the millennials that were almost shut out in the marketplace by all these hedge funds buying these homes are able to get back in the marketplace and buy. And they should buy.<\/q>\n
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