A Change in Forecast

Every year, without fail, the Realtor.com economic research team puts out their annual forecast. This usually comes out in December or the early part of January. Their housing market forecast for 2022 was issued in December of 2021 and spelled out what the experts predicted for the coming year. They are almost always spot on. The past two years, though, have thrown every curveball possible making predictions exceedingly hard to get right. 

For the first time, Realtor.com has amended their forecast. Only halfway through the year, they’ve decided to release a mid-year update with what they think will happen the rest of 2022. That should tell you how wild and unpredictable the housing market is in its current state. 

Here’s what’s up for the remaining part of the year!

In a nutshell, Realtor.com expects that both home prices and mortgage rates will continue to go up while home sales themselves will drop as buyers are priced out of homeownership. In this way, the housing market will continue to cool. However, in a bright spot for frustrated homebuyers, the number of homes on the market is expected to start to increase.

Mortgage rates are now anticipated to hit 5.5% by the end of the year—a rate expected to continue sidelining buyers already grappling with record-high home prices. Initially, the Realtor.com economists predicted they would hit only 3.6% for 30-year fixed-rate loans. However, rates hit a high of 5.3% last month before settling in at around 5.1%, according to Freddie Mac data.

You can read the full updated midyear report here.