This year, the housing market ends with historic highs but should stabilize by next year.
The housing market has seen an extraordinary rise in home prices this past year but some expert say this should stabilize soon. We’ve seen home prices soar 19.9% over the 12-month period, numbers we haven’t seen in years. These numbers have some feeling uneasy that the market may crash as it once did a little over a decade ago. However, according to Forbes, a housing crash in 2022 look very unlikely, prices could actually go even higher. At least that’s according to Redfin’s 2022 real estate outlook, which foresees prices continuing to climb next year.
That said, Redfin does forecast that the rate of home price growth will slow—by quite a bit. By the end of 2022, the real estate brokerage predicts 12-month home price growth will be at 3%. If that rate comes to fruition, it’d mark a 16.9 percentage point drop from the current level of price growth. It’d also mean the housing market would shift from a historic housing boom into a more normalized market where would-be buyers might actually have some time to think through their purchase.
“If annual price appreciation falls to 3%, it would only be the second time it will have fallen so low since the end of the housing crash in March 2012. This low price growth will likely discourage speculators from entering the market and allow more first-time buyers to have a chance at winning a home,” writes Daryl Fairweather, chief economist at Redfin.
As far as 2022 price forecasts go, Redfin’s outlook is relatively bearish. So are the predictions by real estate firm CoreLogic, which foresees just a 1.9% price rise next year, and the Mortgage Bankers Association, which predicts the median price of existing homes will drop 2.5% by the end of 2022.