2021 Housing Market Concludes With Price Growths, What To Expect In 2022
The winter housing market in the US started heating up again in December, potentially leading to a hot market in the first quarter of 2022. More buyers have become motivated to hop on real estate transactions due to looming mortgage rate increases as well.
Listing prices in December returned to double-digits similar to what the market looked like during the spring/summer of 2021 when real estate was seeing some of its most competitive transactions since the start of the pandemic.
According to data from Realtor.com’s chief economist Danielle Hale, “December data offered a fitting finish to the frenzy of the past year. Annual listing price growth hit double-digits again nationwide and in many of the hottest markets, after four months of single-digit pace this fall.”
“Despite buyer challenges like rising prices, limited inventory and fast-paced sales, real estate activity maintained a brisk pace throughout 2021 as factors like low mortgage rates enabled home shoppers to persist. With rate hikes now on the horizon, buyers may be trying to get ahead of higher monthly housing costs, in turn driving up competition and prices,” Hale explained.
“Our 2022 forecast anticipates affordability challenges this year, but also that trends like rising incomes and workplace flexibility could offer some Americans a better shot at finding a home.”
“For those who weren’t successful in 2021, we expect better luck in the coming months as more sellers plan to enter the market – and if December’s listings are an indication, with high asking prices in mind,” she explained.
In 2021 the demand for homes was much higher than the supply, which drove prices even higher and will likely continue to drive the prices up in 2022. Realtor.com is also predicting that these price increases will cause a lot of affordability issues in the new year. The average price for a home in the US is now 25% higher than it was in 2019.
Within the past two years the average price for a typical 2,000 square foot single-family home increased by 18.6% consecutively. More than 25% of the US’s largest markets saw double-digit home price gains in 2021.
While the winter is typically a cooling off period for the market, the past two months have seen historically low listing times, as buyer activity continues to outmatch the limited inventory available throughout the nation.
When compared to the national pace of the market, time on the market was lower in the US’s 50 largest metropolitans with an average of 48 days on the market, seven days less than last years average and 25 days less than 2019’s average.
Inventory is expected to increase to ideally meet the demand of buyers in America. December data did show more new sellers entered the market when compared to last year’s numbers, a majority of these listings, however, are in cities.
Eric Mastrota is a Contributing Editor at The National Digest based in New York. A graduate of SUNY New Paltz, he reports on world news, culture, and lifestyle. You can reach him at email@example.com.