Jump to content

Home price growth in 2022 to be the slowest in a decade, says Realtor.com

Swatkat

By Swatkat
in Discussions

 Share

Recommended Posts

Swatkat LEGEND

Swatkat

Posted
Posted

The run on home prices is almost over. At least that’s what economists at Realtor.com are projecting.

The real estate listing site, which is owned by News Corp, forecasts median existing home sales prices will rise 2.9% over the coming 12 months. That would mark a substantial slowdown from the S&P CoreLogic Case-Shiller index’s latest reading of year-over-year U.S. home price growth (up 19.5% between September 2020 and the same month this year). If Realtor.com’s projection comes to fruition, it would also be the slowest 12-month rate of price growth since 2012.

No, this wouldn’t be a housing correction or crash. However, slower price growth would provide buyers a bit of breathing room. Less bidding. More time to search for homes. And maybe even a chance for some buyers to finally save up for a down payment. 

“After years of declining, the inventory of homes for sale is finally expected to rebound from all-time lows…Homebuyers will have a better chance to find a home in 2022, but fierce competition and affordability continue to be a challenge,” wrote Realtor.com researchers in their outlook.

R5Wbs-u-s-home-price-growth-12.png?w=840

What’s driving the cooling? A lot of it boils down to mortgage rates. 

Amid the COVID-19 recession, the average 30-year fixed mortgage rate plunged to a historical low of 2.7%. Those low rates coupled with the work-from-home trend (allowing buyers to stretch further into the burbs) and a demographic wave of first-time millennial homebuyers helped to spur one of the most competitive housing markets in U.S. history. But an inflation-concerned Federal Reserve is now likely to raise rates. Indeed, Realtor.com foresees the current 3.1% average 30-year rate rising to 3.6% by the end of 2022.

Rising rates, of course, would put downward pressure on price growth as it raises the cost to buy and locks some buyers out altogether. Let’s say a homebuyer took out a $500,000 mortgage at a 3.1% mortgage rate. If it’s a 30-year loan, their monthly payment before taxes or insurance would be $2,135. But if their mortgage rate were 3.6%, they would pay $2,273 per month—or nearly an additional $50,000 over the course of the loan.

When it comes to 2022 home price forecasts, the Realtor.com outlook is certainly on the lower end of the spectrum. CoreLogic and Redfin have similar outlooks, predicting year-over-year growth rates of 2.5% and 3%, respectively, next year. Meanwhile, Zillow(which is predicting 13.6% price growth), Fannie Mae (7.9%), and Freddie Mac (7%) are all much more bullish.

That said, buyers and sellers alike should take housing market forecasts with a grain of salt. Look no further than the outlooks real estate firms put out at the onset of the pandemic. During the early months of the lockdowns, Zillow and CoreLogic both projected home prices would fall by 2021. Not only did prices not fall, they have since skyrocketed. 

 

 
  •  
  •  
  •  
  •  
  •  

© 2021 Fortune Media IP Limited. All Rights Reserved. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice | Do Not Sell My Personal Information | Ad Choices 
FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.
Quotes delayed at least 15 minutes. Market data provided by Interactive Data. ETF and Mutual Fund data provided by Morningstar, Inc. Dow Jones Terms & Conditions: http://www.djindexes.com/mdsidx/html/tandc/indexestandcs.html.
S&P Index data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Terms & Conditions. Powered and implemented by Interactive Data Managed Solutions.

Link to comment
Share on other sites
phatposts Sr. Hero

phatposts

Posted
Posted
39 minutes ago, tables said:

em increase lo... naa banana... 2018 lo 300K unna dallas/austin houses ippudu 600K plus. is that true value or just hype artham avatledu.

Definitely true value. 

Naa freind (real friend :) ) Dallas puram lo 1 year back signed. 

420+50K upgrades = 470

Oka 3 weeks back closed. Appraised at 610. Maa vaadidi 1st house, so 5% down. House occupy cheyyakundane $100K+ appraised value lo unnadu. If he wants to do cash out refi - he can do that and take 80-110K cash. 

So imagine last 5 years lo illulu konnavvaallu andaru kooda unna equity, cashout of the appraised values petti either upgrading to next level home or buying another house for investment. 

Link to comment
Share on other sites
Swatkat LEGEND

Swatkat

Posted
  • Author
Posted
49 minutes ago, phatposts said:

Definitely true value. 

Naa freind (real friend :) ) Dallas puram lo 1 year back signed. 

420+50K upgrades = 470

Oka 3 weeks back closed. Appraised at 610. Maa vaadidi 1st house, so 5% down. House occupy cheyyakundane $100K+ appraised value lo unnadu. If he wants to do cash out refi - he can do that and take 80-110K cash. 

So imagine last 5 years lo illulu konnavvaallu andaru kooda unna equity, cashout of the appraised values petti either upgrading to next level home or buying another house for investment. 

So epudu me friend ah 610 k tho konna kuda he wont get the aame house in the same range that he bought an year ago. Also, he pid mortagge for an year and half.  So there is no real profit i can see in this case. 

Link to comment
Share on other sites
Swatkat LEGEND

Swatkat

Posted
  • Author
Posted
51 minutes ago, phatposts said:

Definitely true value. 

Naa freind (real friend :) ) Dallas puram lo 1 year back signed. 

420+50K upgrades = 470

Oka 3 weeks back closed. Appraised at 610. Maa vaadidi 1st house, so 5% down. House occupy cheyyakundane $100K+ appraised value lo unnadu. If he wants to do cash out refi - he can do that and take 80-110K cash. 

So imagine last 5 years lo illulu konnavvaallu andaru kooda unna equity, cashout of the appraised values petti either upgrading to next level home or buying another house for investment. 

610-470=140 and he oaid at 3 percent 12-15k interest so that would be 125 k and property taxes 115k.

Link to comment
Share on other sites
phatposts Sr. Hero

phatposts

Posted
Posted
27 minutes ago, Swatkat said:

So epudu me friend ah 610 k tho konna kuda he wont get the aame house in the same range that he bought an year ago. Also, he pid mortagge for an year and half.  So there is no real profit i can see in this case. 

Mortgage is paid from the date of closing not from the date of signing. Signing appudu 3-5K holding deposit istaru anthe

Link to comment
Share on other sites
pakeer_saab Celebrity

pakeer_saab

Posted
Posted
4 hours ago, Swatkat said:

The run on home prices is almost over. At least that’s what economists at Realtor.com are projecting.

The real estate listing site, which is owned by News Corp, forecasts median existing home sales prices will rise 2.9% over the coming 12 months. That would mark a substantial slowdown from the S&P CoreLogic Case-Shiller index’s latest reading of year-over-year U.S. home price growth (up 19.5% between September 2020 and the same month this year). If Realtor.com’s projection comes to fruition, it would also be the slowest 12-month rate of price growth since 2012.

No, this wouldn’t be a housing correction or crash. However, slower price growth would provide buyers a bit of breathing room. Less bidding. More time to search for homes. And maybe even a chance for some buyers to finally save up for a down payment. 

“After years of declining, the inventory of homes for sale is finally expected to rebound from all-time lows…Homebuyers will have a better chance to find a home in 2022, but fierce competition and affordability continue to be a challenge,” wrote Realtor.com researchers in their outlook.

R5Wbs-u-s-home-price-growth-12.png?w=840

What’s driving the cooling? A lot of it boils down to mortgage rates. 

Amid the COVID-19 recession, the average 30-year fixed mortgage rate plunged to a historical low of 2.7%. Those low rates coupled with the work-from-home trend (allowing buyers to stretch further into the burbs) and a demographic wave of first-time millennial homebuyers helped to spur one of the most competitive housing markets in U.S. history. But an inflation-concerned Federal Reserve is now likely to raise rates. Indeed, Realtor.com foresees the current 3.1% average 30-year rate rising to 3.6% by the end of 2022.

Rising rates, of course, would put downward pressure on price growth as it raises the cost to buy and locks some buyers out altogether. Let’s say a homebuyer took out a $500,000 mortgage at a 3.1% mortgage rate. If it’s a 30-year loan, their monthly payment before taxes or insurance would be $2,135. But if their mortgage rate were 3.6%, they would pay $2,273 per month—or nearly an additional $50,000 over the course of the loan.

When it comes to 2022 home price forecasts, the Realtor.com outlook is certainly on the lower end of the spectrum. CoreLogic and Redfin have similar outlooks, predicting year-over-year growth rates of 2.5% and 3%, respectively, next year. Meanwhile, Zillow(which is predicting 13.6% price growth), Fannie Mae (7.9%), and Freddie Mac (7%) are all much more bullish.

That said, buyers and sellers alike should take housing market forecasts with a grain of salt. Look no further than the outlooks real estate firms put out at the onset of the pandemic. During the early months of the lockdowns, Zillow and CoreLogic both projected home prices would fall by 2021. Not only did prices not fall, they have since skyrocketed. 

 

 
  •  
  •  
  •  
  •  
  •  

© 2021 Fortune Media IP Limited. All Rights Reserved. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice | Do Not Sell My Personal Information | Ad Choices 
FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.
Quotes delayed at least 15 minutes. Market data provided by Interactive Data. ETF and Mutual Fund data provided by Morningstar, Inc. Dow Jones Terms & Conditions: http://www.djindexes.com/mdsidx/html/tandc/indexestandcs.html.
S&P Index data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Terms & Conditions. Powered and implemented by Interactive Data Managed Solutions.

the market always goes opposite to what economists say, it will increase in 2022 for sure

its simple, with so many chasing the limited home inventory, its impossible to expect prices going down

when the employment markets goes down plus interest rate rise, this is when it will start slowing down

correction will be 2023 and beyond, by then prices will rise 10-15% more, which will get corrected

 

  • Haha 1
  • Upvote 1
Link to comment
Share on other sites
Swatkat LEGEND

Swatkat

Posted
  • Author
Posted
31 minutes ago, pakeer_saab said:

the market always goes opposite to what economists say, it will increase in 2022 for sure

its simple, with so many chasing the limited home inventory, its impossible to expect prices going down

when the employment markets goes down plus interest rate rise, this is when it will start slowing down

correction will be 2023 and beyond, by then prices will rise 10-15% more, which will get corrected

 

@pakeer_saab bro ah balvein baabi navvuthunadu @csrcsr ni sari baaaga kummei separate thread esi naku e madhya comedy baga miss avthundhi db lo

Link to comment
Share on other sites
csrcsr LEGEND

csrcsr

Posted
Posted
7 minutes ago, Swatkat said:

@pakeer_saab bro ah balvein baabi navvuthunadu @csrcsr ni sari baaaga kummei separate thread esi naku e madhya comedy baga miss avthundhi db lo

the market always goes opposite to what economists say, it will increase in 2022 for sure

 

Eee statement bro valu edi chepina wrong

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

×
 Share
Go to topic listing
×
×
  • Create New...