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

By
Real Estate Agent with HomeSmart 0561240

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

Whether you're a potential homebuyer, seller, or both, you probably want to know: will home prices fall this year? Lets break down what's happening with home prices, where experts say they're headed, and why this matters for your homeownership goals.

Last Years Rapid Home Price Growth Wasnt the Norm

In 2021, home 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 homes available for sale. That led to competitive bidding wars which drove prices up. CoreLogic helps explain how unusual last years 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 homes for sale.

Home Price Appreciation Moderates Today

This year, home 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):

What

Why do all of these experts agree prices will continue to rise? Its simple. Even though housing supply is growing today, its still low overall thanks to several factors, including a long period of underbuilding homes. And experts say that's going to help keep upward pressure on home 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, its true price appreciation this year wont 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 home prices wont fall in most markets. They'll just appreciate more moderately.

If you're worried the house you're trying to sell or the home 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 home 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, lets connect so you have a local market expert on your side each step of the way.

 

 

 

 

 

Posted by

e signature for Shayne Stone

“YOUR Rock-Solid Choice Realtor for Making Home Sellers a Profit & Home Buyers Equity”

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Comments (7)

Leanne Smith
Dirt Road Real Estate - Golden Valley, AZ
Relocation to NW AZ with elbow room & more freedom

Agree the pendulum is swinging back and the value of homes will also swing back. For those states that use market value in computing assessed value will potentially see a decreased in 2023 property taxes.

Aug 15, 2022 05:12 AM
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Hello Shayne - crystal ball-gazing and forecasts based on facts, fuzzy fiction and likely some form of fantasy are a continuing part of real estate.  My suggestion:   "Hold On".  It's always a ride that has some twists and turns along the way.   

Aug 15, 2022 05:22 AM
Bill Salvatore - East Valley
Arizona Elite Properties - Chandler, AZ
Realtor - 602-999-0952 / em: golfArizona@cox.net

Thanks for the post, very enjoyable.  Have a great Monday and work week.  Sell a house. bill

Aug 15, 2022 05:33 AM
Eric Bouler
Gardner Realtors, Licensed in La. - New Orleans, LA
Listening to your Needs

Happy week with your blog today about prices. Hope it does well for you....

Aug 15, 2022 05:38 AM
Joe Jackson
Keller Williams Capital Partners Realty - Columbus, OH
Clintonville and Central Ohio Real Estate Expert

This is an excellent post with great information. Thanks for sharing it.

Have a super fantastic week!
Joe Jackson, Realtor-KWCP

Aug 15, 2022 06:54 AM
Richard Weeks
Dallas, TX
REALTOR®, Broker

Great information, thanks for sharing.  I hope you have a great day.

Aug 16, 2022 02:52 AM
Kristin Johnston - REALTOR®
RE/MAX Platinum - Waukesha, WI
Giving Back With Each Home Sold!

Great information.   Thanks for sharing and enjoy your day!

Aug 25, 2022 07:04 AM