Active listings will grow 15.0% year-over-year
as the inventory recovery accelerates in 2H 2022; higher home sales
prices (+6.6%) and mortgage rates (to 5.5%) add to affordability
issues
SANTA
CLARA, Calif., June 13,
2022 /PRNewswire/ -- As rising inflation and mortgage
rates bring U.S. housing demand back from the 2021 frenzy,
Realtor.com®'s newly-updated 2022 forecast predicts
inventory will grow double-digits over 2021 and offer buyers a
better-than-expected chance to find a home. Home sales will hit the
second-highest level in 15 years, trailing only the 2021 pace, as
rising incomes combined with higher housing costs continue to
present a mixed bag of affordability issues.
The updated forecast anticipates a summer break from a feverish
pace of home sales that will provide space for active listings to
grow at a faster year-over-year pace than originally projected
(+15.0% vs. +0.3%). Combined with returning seasonality and
builders ramping up production, these trends could lead to a
refresh of the housing market by as early as this fall.
"Financial conditions have shifted in a big way since the end of
2021 and the housing market is adjusting accordingly. As Americans
grapple with higher prices for everyday expenses while today's
buyers face housing costs that are up 50% from a year ago, recent
home sales data shows some are taking a step back from the market,"
said Danielle Hale, Chief Economist
for Realtor.com®. "Our updated 2022 forecast anticipates
that demand will continue decelerating through the summer,
providing breathing room for the inventory recovery to accelerate.
As a result, this fall could be an opportune time to find a home –
for both first-time and repeat buyers alike. Still, preparation
will be key throughout 2022, as it continues to be a seller's
market and asking prices remain high. For buyers who choose to wait
until later in the year, take that time to assess your budget so
you're set up with a strong financial footing whenever you're ready
to move forward."
Realtor.com® 2022 Housing Forecast – Mid-Year
Update
Metric (National
full-year projections)
|
2022 Forecast –
Updated
|
2022 Forecast –
Original
|
Mortgage
Rates
|
to 5.5% (average:
5.0%)
|
3.6% (average:
3.3%)
|
Existing Home
Sales
|
-6.7%
|
+6.6%
|
Existing Home Median
Sales Price
|
+6.6%
|
+2.9%
|
Existing Home For-Sale
Inventory
|
+15.0%
|
+0.3%
|
Single-Family Housing
Starts
|
+5.0%
|
+5.0%
|
Homeownership
Rate
|
65.6%
|
65.8%
|
While Americans have faced a whirlwind of changes so far this
year, a changing economic landscape is the biggest driver of
updates to Realtor.com®'s 2022 housing forecast.
Inflation has made a more significant and long-standing impact on
real estate markets than was anticipated six months ago, and is
reflected in trends like rapidly-climbing mortgage rates. Combined
with record-high home listing prices and rents, home shoppers are
feeling the strain on their budgets. As a result, buyer demand has
been softening this Spring from its early 2022 surge.
Higher costs will continue to challenge 2022 buyers, as mortgage
rates have already far surpassed Realtor.com®'s earlier
prediction of 3.6% and home sale price growth year-over-year is
expected to more than double its originally-forecasted pace (+6.6%
vs. 2.9%). At the same time, Realtor.com®'s updated
projection for year-end 2022 mortgage rates (5.5%) anticipates that
rates have largely adjusted for the bulk of expected 2022 Fed
hikes.
The rapid shifts in the economic landscape have some silver
linings when it comes to housing affordability. With the
unemployment rate near 50-year lows, employers are feeling the
pressure to compete for talent, driving wage growth upwards from
earlier year-over-year predictions (+3.8% vs. +3.3%). The
competitive labor market may also give some buyers more negotiating
power on workplace flexibility, creating more opportunities to
relocate to relatively affordable housing markets. In fact, data
from the first quarter of 2022 showed that 40.5% of
Realtor.com® home shoppers viewed listings located
outside of their current state, up from 33.4% in 2020.
Overall, the updated 2022 forecast reflects a housing market
that is charting a path toward more sustainability, relative to the
past two years of ups and downs. Home sales are still projected to
hit a near record-high pace in 2022 despite trailing 2021 levels
(-6.7%) and their original forecast (+6.6%), while the projected
homeownership rate will hold roughly steady (65.6% vs. 65.8%). For
many Americans, housing affordability will remain a significant
obstacle as demand continues to outmatch supply, although by a
smaller margin than in recent years. Buyers struggling with higher
housing costs can find resources via sites like
Realtor.com®, including its down payment assistance
tool.
About Realtor.com®
Realtor.com®
makes buying, selling, renting and living in homes easier and more
rewarding for everyone. Realtor.com® pioneered the world
of digital real estate more than 25 years ago, and today through
its website and mobile apps offers a marketplace where people can
learn about their options, trust in the transparency of information
provided to them, and get services and resources that are
personalized to their needs. Using proprietary data science and
machine learning technology, Realtor.com® pairs buyers
and sellers with local agents in their market, helping take the
guesswork out of buying and selling a home. For professionals,
Realtor.com® is a trusted provider of consumer
connections and branding solutions that help them succeed in
today's on-demand world. Realtor.com® is operated by
News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move,
Inc. For more information, visit Realtor.com®.
Media Contact
rachel.conner@move.com
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SOURCE Realtor.com