Will home prices drop in 2022? (Podcast) | Mortgage Reports – The Mortgage Reports

December 13, 2021 by No Comments

2022 Home prices: More of the same?

If you’re eyeing a home purchase (or sale) in the coming year, then you’re probably wondering where prices are headed – especially with the hot market we’ve had recently.

As mortgage advisor Arjun Dhingra put it in a recent episode of The Mortgage Reports podcast, “It’s clear that this market has been anything but normal.”

According to Dhingra, we can likely expect 2022 to be more of the same. But why – and when might we expect prices to finally decline? Let’s take a look.

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Why 2022 will be another strong year for housing

According to the Federal Housing Finance Agency, home prices rose a whopping 18.5% between the third quarter of 2020 and the third quarter of 2021. And demand from buyers? That’s been just as strong.

Unfortunately, those housing trends aren’t likely to disappear in 2022.

As Dhingra succinctly puts it, “We are not likely going to see any price cuts or a big uptick in inventory next year. The market is just too hot and stable.”

That stability stems from a number of factors, Dhingra says, including confidence among homebuilders.

“We are not likely going to see any price cuts or a big uptick in inventory next year. The market is just too hot and stable.”

“That confidence has been reported consecutively month over month – this last quarter and the quarter previous,” Dhingra says. “And that just means that builders are going to remain confident in wanting to build homes and seeing the opportunity there – despite the shortages and the higher cost to build.”

The nation’s monthly housing supply is also healthy and moving quickly.

And, most importantly according to Dhingra, existing homeowners are in a very good place.

“Their rates are low, their equity is high, and their payments are very affordable,” he says. “Their FICO scores are also as high as they’ve been through any housing cycle in the United States economy’s history, so there just aren’t a lot of people that are in a rush to unload their home.”

What could turn home prices around?

The only thing that might cause the real estate market to weaken and home prices to drop would be what Dhingra calls a “shock to the economy.” This could come out in one of three ways:

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Source: https://themortgagereports.com/87353/will-home-prices-drop-2022-podcast

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