The new year brings hope for home buyers
Interest rates plummeting to historic lows in 2020 spurred insatiable demand for home buying and the frenzied market consumers currently face.
This led to unparalleled price growth and vanishing affordability around the country.
Those metro areas should offer more approachability for first–time home buyers instead of what they’ve grown accustomed to over the past year.
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Where home sales are cooling off in 2022
The pandemic shifted home sales trends as the rise in remote flexibility enabled many borrowers to search where their dollars would go further.
“Some of the nation’s largest and priciest metro areas are expected to see home sales growth slip in 2022,” according to Realtor.com Chief Economist Danielle Hale.
U.S. home buying is likely to remain strong in 2022, with sales estimated to climb 6.6% year–over–year. However, 16 of the 100 most populous metropolitan areas project to see declining sales from 2021 to 2022, with some drops coming from normally hotter markets.
Cities lining both coasts make up the majority of the biggest expected declines.
|Metro||Projected annual sales change|
|Cape Coral, Fla.||-5.60%|
|San Jose, Calif.||-4.00%|
Where home prices are slowing down
After a year of record–setting home value appreciation, the rate of growth should start coming back to earth.
Realtor.com data shows overall annual sales prices jumped about 12% in 2021 and it forecasts an average gain closer to 3% in 2022. While buyers shouldn’t necessarily expect bargains, 18 of the largest 100 cities project price growth below the national average.
Honolulu and two Connecticut metros head the list for slowest expected home price growth next year:
|Metro||Projected annual price change|
|New Haven, Conn.||1.00%|
|Baton Rouge, La.||1.50%|
|North Port, Fla.||1.70%|
Where competition and values are set to heat up
On the other hand, booming job markets – especially in the tech field – and escapes from the typically busier, space–constrained locales for remote workers fuel the hottest expected cities for 2022.
“With thriving local economies, low unemployment rates, convenient access to the outdoors and relatively affordable housing, many of the top markets offer the best of both small–town quality of life and big–city job security,” said Hale.
Salt Lake City and Boise, Idaho, top the list of projected combined annual change in housing sales and price growth in 2022.
|Metro||Projected combined annual sales and price change||Projected annual sales change||Projected annual price change|
|Salt Lake City||23.70%||15.20%||8.50%|
What are today’s mortgage rates?
As the economy continues to recover, Realtor.com anticipates mortgage rates to rise to 3.6% by the end of 2022. Meanwhile, the uncertainty brought by Covid–19 variants clouds the trajectory.
From a historical perspective, today’s rates are beneficial for most borrowers and potential homeowners.
Check your borrower eligibility and the latest interest rates to see if you’re ready to buy and the best loan type for you.
The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.