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What Does the Rest of the Year Hold for Housz Prices?



Whether you’re a potential houszbuyer, seller, or both, you probably want to know: will housz prices fall this year? Let’s break down what’s happening with housz prices, where experts say they’re headed, and why this matters for your houszownership goals.

Last Year’s Rapid Housz Price Growth Wasn’t the Norm In 2021, housz prices appreciated quickly. One reason why is that record-low mortgage rates motivated more buyers to enter the market. As a result, there were more people looking to make a purchase than there were houszes available for sale. That led to competitive bidding wars which drove prices up. CoreLogic helps explain how unusual last year’s appreciation was: Price appreciation averaged 15% for the full year of 2021, up from the 2020 full year average of 6%.” In other words, the pace of appreciation in 2021 far surpassed the 6% the market saw in 2020. And even that appreciation was greater than the pre-pandemic norm which was typically around 3.8%. This goes to show, 2021 was an anomaly in the housing market spurred by more buyers than houszes for sale.

Housz Price Appreciation Moderates Today This year, housz price appreciation is slowing (or decelerating) from the feverish pace the market saw over the past two years. According to the latest forecasts, experts say on average, nationwide, prices will still appreciate by roughly 10% in 2022 (see graph below):


Why do all of these experts agree prices will continue to rise? It’s simple. Even though houszing supply is growing today, it’s still low overall thanks to several factors, including a long period of underbuilding houszes. And experts say that’s going to help keep upward pressure on housz prices this year. Additionally, since mortgage rates are higher this year than they were last year, buyer demand has slowed. As the market undergoes this change, it’s true price appreciation this year won’t match the feverish pace in 2021. But the rapid appreciation the market saw last year wasn’t sustainable anyway.

What Does That Mean for You? Today, the market is beginning to move back toward pre-pandemic levels. But even the forecast for 10% home price growth in 2022 is well beyond the 3.8% that’s more typical for a normal market. So, despite what you may have heard, experts say housz prices won’t fall in most markets. They’ll just appreciate more moderately. If you’re worried the housz you’re trying to sell or the housz you want to buy will decrease in value, you should know experts aren’t calling for depreciation in most markets, just deceleration. That means your housz should still grow in value, just not as fast as it did last year.

Bottom Line If you’re thinking of making a move, you shouldn’t wait for prices to fall. Experts say nationally, prices will continue to appreciate this year, just at a more moderate pace. When you’re ready to begin the process of buying or selling, let’s connect so you have a local market expert on your side each step of the way.

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