July undoubtedly started with a bang. But can the fireworks continue? Let’s take a look at Realtor.com‘s updated 2022 housing forecast to see if sparks will continue to fly or if trends will shift to a slower burn. Note: the original forecast was published in December 2021.
Overall home sales slow down.
As we take a look at Realtor.com’s updated 2022 housing forecast, several factors jump out.
First of all, the updated forecast predicts a slight summer break from the initial early-year frenzy. Thus, year-over-year home sales are predicted to be much lower.
Initially, home sales were expected to increase about 6.6 percent. Upon further review of current market conditions, that figure is now expected to decrease by about 6.7 percent.
But even with the projected decrease, the figures still indicate 2022 will be the second-highest tally of home sales since 2007. If all goes accordingly, the total figure will only trail 2021 in the end.
Inventory looks promising.
Sometimes slowing down is a good thing. For instance, experts are hoping the break will allow inventory to catch up with housing demands. That means year-over-year inventory growth will be higher than originally projected.
In fact, the revised figures illustrate the existing homes for-sale inventory will increase up to 15 percent versus the original 0.3 percent.
Conditions look good for a fall reboot.
Secondly, more inventory and a slow summer may mean more buyers will be ready to make a move as things cool off.
Industry experts say potential first-time and repeat buyers will be able to use the time to get their finances aligned. Because they know average sales prices and mortgage rates are rising, they can look at their budget and options and plan accordingly.
Median sales prices may increase at a faster rate.
The fact median sales prices will continue to rise is no surprise. But the rate at which they have increased may be.
Originally, median sales prices were expected to rise about 2.9 percent throughout the year. Now, it’s nearly double at a rate of 6.6 percent.
Mortgage rates may also be higher than original predictions.
Once again, everyone expected a slight increase in mortgage rates year-over-year. What was unexpected was how fast the mortgage rates surpassed the initial 3.6 percent prediction.
In the second full week of June 2022, mortgage rates climbed past 6 percent.
Summary
From a look at Realtor.com’s updated 2022 housing forecast to dipping your toe in the market, real estate continues to be a good investment for many. If you are ready to look at your local options, reach out to Ryan Roberts today. For more industry news, trends and local spotlights, keep reading our blogs.