What Will Home Prices Be Like This Year?
The insanity that was the United States real estate market of 2021, still has all of us reeling a bit. Regardless if you (or anyone close to you) has buying or selling on the brain, you are probably wondering what the heck home prices will do this year. Will they go up or down? Will the bidding wars be as competitive as last year? Let’s dive in for a sec.
Every year, major housing industry entities release projections for the rise or fall of home prices in the year.
If prices are going to increase, buying now and waiting to sell makes sense. If prices are going to decrease, selling now and waiting to buy is more logical.
Rather than just looking at one projection, let’s examine projections from various industry powerhouses including, Freddie Mac, Fannie Mae, and the Mortgage Bankers Association to get a broader view of what experts are predicting for this year.
Regardless of the predictions from these organizations, I always say, buying or selling a home is best timed based on when YOU want to move. But, it’s still a good idea to be aware of which direction prices are headed to help make the best decision, especially if you are in the position to be flexible.
So, let’s explore some different home price projections for 2022.
All of the industry entities I looked at projected continued price appreciation in the housing industry, though they differed slightly in their exact projections.
CoreLogic – 3.5% projected price increase
Fannie Mae– 5.1% projected price increase
Freddie Mac – 5.3% projected price increase
Mortgage Bankers Association– 8.4% projected price increase.
If we average these four projections together, we get a mean price appreciation of 5.58%. This is very close to the average projected price increase, 5.6%, found by Reuters in a survey of 40 housing analysts. In other words, experts seem to agree that home prices will go up by around five and a half percent next year.
But what do these projections really mean?
It means houses will continue to appreciate at a healthy rate, but just not as hugely as they did over the past year, where in Utah, we saw prices increase A WHOPPING 27%!
At first glance, that might feel like the “market is falling” but 5.58% is still a significant amount when you think about pricing for homes in our area. According to the average projection of 5.58%, if a home is selling for $400k today that same home will be worth $422,320 at the end of next year. That’s a difference of almost $23,000 in just one year.
That’s a lot of money!
As a seller, these kinds of projections might make you wonder whether it’s worth holding off on selling your home to take advantage of the price appreciation next year. Of course, it’s not guaranteed that your specific home will be worth more a year from now. Many factors go into how much a buyer is willing to pay for a home and future projections aren’t guaranteed. Even if the general market trend is higher prices like these forecasts suggest, you might still be able to get more for your house today than you would by waiting. I’d have to take a look at your home, where it’s located, who your most likely buyer is, and give you my best guess based on what’s happening in the market in your specific situation.
Regardless of what the projections say, the best time for you to sell your home is when you’re ready to do so. Ideally, we time it when it can get the most buyers possible, such as avoiding the holidays if you can, but even then homes are selling, just not for as much as other times of the year.
The best thing to do is reach out to me and schedule a time to talk. I’ll walk you through what’s happening in the market now and how to position your home properly for the best possible outcome based on your timing goals. We can talk about your life plans, personal financial situation, and more about how these projections may play out when it comes to your specific home.
As a buyer, projections of significant home price increases next year could make you feel like you need to buy now. Again, that might be the right choice for you. For one thing, these projections are just that, projections. Even experts cannot see into the future and guarantee what home prices will be. If only we had crystal balls!
Projections are useful for getting an idea of what prices may look like next year, but they aren’t the only things you should consider when deciding when to buy a home. There’s are so many other factors to consider such as your financial situation, the time of year, and even what your life plans look like over the next few years.
As soon as you start thinking about buying or selling a home, feel free to reach out. It’s never too early to examine everything and start coming up with a real estate plan that will work for you when the time is right.
And, don’t worry, I won’t push you to move forward with buying or selling before you say “I’m ready!” All I want to do is get you prepared before you are ready to go so when the time is right everything goes perfectly.
Email me at firstname.lastname@example.org when you want to talk more. I’m really looking forward to hearing from you!
I'm Robin and I love living in Utah. I love helping first time home buyers make their first home more affordable and I love helping sellers looking to move up to their forever home in and around Silicon Slopes.
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