2022 Housing Forecast Update

Published:
January 5, 2021
Last updated:
August 11, 2022
In This Article

It’s been an interesting year to say the least. And while most industries have suffered throughout the health crisis, the real estate industry has been very active throughout the year, all across the country. Buyers may have stalled early on when the pandemic first hit, but things quickly picked up shortly after.

As such, home prices have increased at a rapid pace throughout the past 12 months. While the years started with mortgage rates at low levels, that has changed. Buyer demand and ultra-low mortgage rates combined to create a very competitive real estate market, but affordability is falling fast.

What will happen in the second half of 2022? According to experts, the situation is incredibly fluid. Homes will continue to appreciate, but inflation and basis point rate hikes by the Fed are pushing mortgage rates higher faster than originally anticipated, and total home sales will moderate as a result.

Check out this infographic:

  • Home appreciation predicted to rise by only 10.3%
  • Mortgage rates keeping pace with inflation
  • Home sales expected to moderate swiftly

Housing Market Forecast for Rest of 2022

Housing Forecast 2022

Experts forecast an optimistic year for the housing market. in 2021, home prices across the US increased by 19.3%. And in 2022, they were expected to increase at a rate of 14.3%, according to real estate research firm Zillow.

Fannie Mae, Freddie Mac, the MBA, and NAR also had their own forecasts for home prices in 2022, which seemed to be much lower than Zillow’s prediction:

  • Fannie Mae forecast: +7.4%
  • Freddie Mac forecast: +7.0%
  • MBA forecast: +5.1%
  • NAR forecast: +2.8%

As you can see, there was a general consensus that suggests that home prices will indeed rise over the next year. Similar trends were being forecasted for the Pacific Northwest.

However, those numbers are now being revised.

Mortgage Interest Rates

At the start of the year, buyers were still able to offset rising home prices with very low mortgage interest rates to make their home loans more affordable. Experts at the time agreed that interest rates are projected to remain at or near 4% in 2022, fueling strong buyer activity, and continuing the trend from 2021, when mortgage interest rates hovered around 3%.

2022 Projected Mortgage Interest Rates from January

The following mortgage interest rate projections for 2022 have been released by the following entities:

  • Fannie Mae: 3.3%
  • Freddie Mac: 3.5%
  • MBA: 4.0%
  • NAR: 3.5%

From these forecasts, many experts felt it was safe to say that mortgage interest rates will continue to remain very low throughout 2022.

However, multiple basis point rate hikes by the Fed in an effort to slow inflation changed the game. Mortgage rates are already between 5% and 6%, and the Fed has indicated they plan 2-3 more hikes before the end of the year.

Rates By Decade

To give you a perspective on what mortgage interest rates have been doing over the past few decades, take a look at the following:

  • Aug 2022: 5.6%
  • Jan 2022: 3.1%
  • 2010s: 4.09%
  • 2000s: 6.29%
  • 1990s: 8.12%
  • 1980s: 12.7%
  • 1970s: 8.86%

Clearly, the current mortgage rate is back on the rise, giving buyers pause when it comes to getting into the real estate market in 2022.

Home Sales

Home sales are now forecasted to begin to moderate in 2022 as interest rates climb. Low inventory is still fueling the real estate market across WA, OR, CO, and ID, but affordability is expected to start slowing demand.y.

2022 Total Home Sale Forecasts from January

Fannie Mae:

  • 2021 forecast: 6.8 million
  • 2022 forecast: 6.5 million

Freddie Mac:

  • 2021 forecast: 6.8 million
  • 2022 forecast: 6.8 million

MBA:

  • 2021 forecast: 6.9 million
  • 2022 forecast: 7.3 million

NAR:

  • 2021 forecast: 6.8 million
  • 2022 forecast: 6.8 million

Current forecasts are now projecting total home sales for 2022 to come in below 6 million, well below earlier predictions. That doesn’t mean it isn’t a good time to buy a home, especially with values still climbing.

Could 2022 be the year that you make a move and buy a home in WA, OR, ID, or CO? If so, you’ll need a mortgage to help finance your purchase. And Sammamish Mortgage would love to help!

Today’s Mortgage Rates

Why Choose Sammamish Mortgage?

Sammamish Mortgage has been in the mortgage industry since 1992 and has assisted many buyers in the Pacific Northwest. If you are looking for mortgage financing in Washington State, Colorado, Idaho, or Oregon, we can help. We offer plenty of mortgage programs with flexible eligibility criteria.

Contact us if you have any mortgage-related questions or concerns. If you are ready to move forward, you can view rates, obtain a customized instant rate quote, or apply instantly directly from our website.

Get an Instant Mortgage Rate Quote Today

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