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Housing Market Forecast 2022: Housing Authorities Predict Near-10% Price Gains

Housing Market Forecast 2022: Housing Authorities Predict Near-10% Price Gains
sam wigness headshot Staff

Based on industry forecasts, homebuyers can confidently expect home prices to continue rising through next year. But how much home prices will grow isn’t so clear.

In October, four major housing authorities released their forecasts for home price growth over the next year. Their predictions range from 2.2% to 16% — leaving the door open for anything from a dramatic slow down to a near repeat of 2021’s record run-up in home prices.

For homebuyers and homeowners, these forecasts represent tens of thousands of dollars to list prices and home equity gains. Having even a broad sense of what to expect in 2022 may influence buying, selling, and refinance decisions.

2022 home price forecasts

Home prices increased at a record pace in 2021 and are on track to finish the year up 19.5% from December 2020, according to Zillow. This growth is expected to decelerate in 2022, but the pace of this slowdown is still very much in question.

In early October, CoreLogic came out with a forecast of 2.2% growth in home prices from August 2021 to August 2022, representing a dramatic slow-down in home price increases. Using the median sales price of $404,700 of houses sold in the third quarter of 2021, this rate would add just $8,903 to the median sales price.

This is the best case scenario for homebuyers as 2.2% growth is below average rate of home appreciation of 4-5%. However, CoreLogic’s forecast is substantially lower than its peers’.

On the other end of the spectrum, Goldman Sachs projects 16% home price growth by the end of 2022. That amounts to an additional $64,752 to the current national median sales price. While that’s not ideal for homebuyers in 2022, it’s a dream come true for homeowners benefitting from home equity gains.

Forecasts from Fannie Mae (7.4%) and Zillow (13.6%) suggest moderate price growth deceleration from Q42021 to Q42022. Both are substantially slower than the 19.5% pace in 2021, but well above average home appreciation.

Related: 2022 Mortgage Rate Forecast: Housing Authorities Weigh in

What home price growth means for consumers

While home price growth percentages seem a little abstract, they translate to real dollar amounts that consumers may have to deal with in 2022.

Here’s what these growth percentage forecasts look like in terms of home prices.

Housing Authority 2022 home price growth forecast Increase to national median sales price* Forecasted 2022 national median sales price
Fannie Mae7.4%$29,947$434,647
Goldman Sachs16.0%$64,752$469,452
*Q3 national median sales price of $404,700 from Fred Economic Data.

Homebuyers who wait a year are essentially playing the price growth forecast lottery. The median sales price could be up $9,000 or $65,000 — and it’s very hard to predict.

Meanwhile, homeowners already hit the jackpot in 2021 with near-20% home appreciation. Now, the question is whether to cash in now by selling or refinancing, or doubling down for another year of double-digit appreciation.

Some references sourced within this article have not been prepared by Fairway and are distributed for educational purposes only. The information is not guaranteed to be accurate and may not entirely represent the opinions of Fairway.

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