If you’re thinking of buying a home in today’s housing
market, you may be wondering how strong your investment will be. You might be
asking yourself: if I buy a home now, will it lose value? Or will it continue
to appreciate going forward? The good news is, according to the experts, home
prices are not projected to decline. Here’s why.
With buyers still outweighing sellers, home prices are
forecast to continue climbing in 2022, just at a slower or more moderate pace.
Why the continued increase? It’s the simple law of supply and demand. When
there are fewer items on the market than there are buyers, the competition for
that item makes prices naturally rise.
And while the number of homes for sale today is expected to
improve with more sellers getting ready to list their houses this winter, we’re
certainly not out of the inventory woods yet. Thus, the projections show
continued appreciation, but at a more moderate rate than what we’ve seen over
the past year.
Here’s a look at the latest 2022 expert forecasts on home
price appreciation:
What’s the biggest takeaway from this graph? None of the
major experts are projecting depreciation in 2022. They’re all showing an
increase in home prices next year.
And here’s what some of the industry’s experts say about how
that will play out in the housing market next year:
Brad Hunter of Hunter Housing Economics explains:
“. . . the recent unsustainable rate of home price
appreciation will slow sharply. . . . home prices will not decline. . . but
they will simply rise at a more sustainable pace.”
Danielle Hale from realtor.com agrees:
“Price growth is expected to move back toward a normal
range, but this is on top of recent high prices, . . . So prices will [still]
hit new highs. . . . The pace of price growth is going to slow notably . . . ”
What Does This Mean for the Housing Market?
While home price appreciation is expected to continue, it
isn’t projected to be the record-breaking 18 to almost 20% increase the market
saw over the past 12 months. Overall, it’s important to note that price
increases won’t be as monumental as they were in 2021 – but they certainly won’t
decline anytime soon.
What Does That Mean for You?
With motivated buyers in the market and so few homes
available to purchase, the imbalance of supply and demand will continue to put
upward pressure on home prices in 2022. And when home price appreciation is in
the forecast, that’s a clear indication your investment in homeownership is a
sound one.
Bottom Line
It’s important to know that home prices are not projected to
decline in the new year. Instead, they’re forecast to rise, just at more
moderate pace. Let’s connect to make sure you’re up to date on what’s happening
with home price appreciation in our market, so you can make an informed
decision about your next move.
Source: Real Estate with Keeping Current Matters
