TRENDS & MARKET OUTLOOK

Housing was one of the strongest sectors of the economy for 2021, but rising interest rates and out-of-control inflation are causing many to wonder if strong sales and higher prices will continue. What’s the outlook for housing in 2022?

HOME PRICES WILL CONTINUE TO RISE. Lawrence Yun, chief economist for the National Association of REALTORS, believes the number of home sales will decline in 2022 but will still outpace pre-pandemic levels, based on strong demand from homebuyers.

Economists disagree on how much housing prices will rise this year. Goldman Sachs economists predict that home prices will climb another 16% in 2022, reports Houwzer.com. Yet, Corelogic has lowered its forecast from 2.2% to 1.9%, according to Fortune.com. The Mortgage Bankers Association (MBA) offers a mixed take for 2022 – that the median price of existing homes will post a 15.3% year-over-year gain to $362,000 in the first quarter of 2022, but that prices will fall as the year progresses.

COVID-19 IS STILL DRIVING HOME

PURCHASES. The pandemic disrupted schools, childcare, healthcare and employment, particularly in service and hospitality industries. According to the Harvard Model Congress 2022, the number of Americans working from home skyrocketed from 8% in February 2020 to 35% in May.

Apollotechnical.com assembled statistics that suggest telecommuting is here to stay. A survey conducted of 1,500 hiring managers by Upwork found that 61.9% of the companies were planning more remote work now and in the future, resulting in 36.2 million teleworkers (22% of Americans) will be working remotely by 2025. A PwC survey also found that 72% of those workers surveyed would like to continue working from home for at least 2 days a week

even when they can go back to the office full time, and 32% said they would like to work from home permanently.

Telecommuters are rethinking how they want to live their lives. They like the freedom and increased productivity working from home has given them to have more time for their families. They want more space and found that they could sell their expensive urban homes for roomier and more affordable housing in rural areas, suburbs and exurbs. According to Forbes.com, telecommuters want homes with office spaces, workout rooms, and other amenities which will change how homes are planned and designed.

Millennials will lead homebuying trends. Millennials were hit hard by the Great Recession of 2008, with impacts that are still being felt fourteen years later. They delayed forming households, and have been unable to accumulate the wealth of previous generations. While they make up 35% of workers, they only owned about 5.1% of all the wealth in 2020, compared to baby boomers who owned 21% of US wealth in 1989. Now, millennials make up 37% of homebuyers, which is driving demand for housing.