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2022 Housing Market Forecast Midyear Update: More Options for Home Shoppers

CEO Khai Intela
Fed Funds Rate Expectations Shift The housing market is constantly evolving, and it's essential for home shoppers to stay up to date with the latest trends and forecasts. The midyear update for the 2022 housing...

Fed Funds Rate Expectations Shift Fed Funds Rate Expectations Shift

The housing market is constantly evolving, and it's essential for home shoppers to stay up to date with the latest trends and forecasts. The midyear update for the 2022 housing market forecast brings promising news for home buyers. While there have been some changes in mortgage rates and home sales, there are more options available in the market.

A Changing Economic Landscape

Inflation is High and Monetary Policy Pivots

The revised outlook for the housing market is influenced by significant changes in monetary policy and financial conditions. Inflation has accelerated, surpassing initial expectations and prompting the Federal Reserve to adjust its asset purchase program and raise expectations for short-term rates. This tightening cycle has resulted in a shift in the housing market, leading to adjustments in mortgage rates and consumer decisions.

Mortgage Rates Mortgage Rates

The rise in mortgage rates, combined with higher home prices, has increased monthly mortgage payments significantly. This has affected homebuyer demand, making it more challenging for some households to enter the market. However, there is still a sense of urgency among home shoppers to secure a lower rate, which has maintained activity in the market.

Employment and Income Remain High, Supporting Demand Despite Tighter Financial Conditions

Despite the ongoing impact of the pandemic on the labor force and the economy, employment and income remain high. The unemployment rate has decreased, and wages continue to grow, boosting consumer confidence and enabling workers to explore housing options. Additionally, increased workplace flexibility allows for more people to relocate and find alternatives to mitigate rising housing costs.

Unemployment Rate Trend Unemployment Rate Trend

Economic Growth Slows as Crisis-Era Fiscal Stimulus Fades and Global Uncertainties Weigh

Although the economy is experiencing growth, there are factors that may impact its trajectory. The decline in GDP forecast is influenced by inflation, tighter financial conditions, and global uncertainties. The winding down of pandemic aid and disruptions from global events pose challenges and contribute to uncertainties in supply chains and increased consumer unease.

GDP Growth GDP Growth

Key 2022 Housing Trends

State of Housing - The Market Settles Down as Home Sales Moderate, and Price Growth Eases

After a period of fluctuation in the housing market, there has been a settling down in home sales and price growth. While 2021 exceeded expectations, cost challenges have led to a revision in home sales projections for 2022. However, as conditions shift and buyers and sellers adjust their expectations, there will still be transaction activity, albeit at a slower pace. The homeownership rate is also affected by the share of purchases by non-occupiers and the pressure on housing costs.

Builders Ramp Up to Tackle Housing Undersupply

The undersupply of housing continues to be a pressing issue, and efforts are being made to address it. The government has introduced plans to make it easier to permit and fund smaller, more affordable homes, encouraging construction in this sector. Single-family housing starts are expected to reach a 16-year high in 2022, although challenges such as rising costs and labor shortages need to be overcome.

Construction Construction

Home Buyers See the Number of Options Improve, but Costs Remain High for Both Buyers and Renters

Despite the high costs of homeownership, home buyers can benefit from the increasing number of options available in the market. More homeowners are looking to sell and take advantage of favorable conditions, leading to a growth in inventory. This provides opportunities for home shoppers to find their ideal homes. Renters, especially millennials, may also choose to enter the market due to rising rents, fueling persistence in home shopping.

Active Home Listings Active Home Listings

Home Sellers Face More Competition, but Seller-Buyers Get More Options

As more sellers enter the market, competition among sellers increases. This brings about a balance and a shift away from the seller-friendly market conditions experienced recently. However, seller-buyers, who have accumulated significant equity over time, can leverage this advantage in their home purchase. With a larger downpayment, they can offset the impact of higher mortgage rates. Timing is crucial in a transitioning market, and sellers need to stay informed about the latest market information.


Stay informed with the latest housing market trends and forecasts to make informed decisions as a home shopper. Despite some changes in mortgage rates and home sales, there are more options available, providing opportunities for buyers. With a good understanding of the market conditions and a sense of urgency, home shoppers can navigate the 2022 housing market successfully. Subscribe to our mailing list for monthly updates and notifications on the latest data and research.