According to economists for Realtor.com, a real estate listing site owned by News Corp., the run-on home prices is almost over. Realtor.com is forecasting that over the next 12-months the median existing home sales prices will rise 2.9%. That would be a substantial slowing, as U.S. home prices year-over-year in September were up 19.5%.
If Realtor.com projections are correct, it would be the slowest growth in home appreciation since 2012. Realtor.com researchers in their 2022 outlook have written that, “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.”
They also foresee that the current 30-year mortgage interest rate rising from current 3.1 average levels to 3.6% or higher by the end of 2022. Rising rates would put downward pressure on price growth as it raised the cost to buy and would lock out some would be buyers altogether.
Opinions, of course, vary as do their predictions for the growth of median homes prices. Relator.com is on the low end, as are CoreLogic at 2.5% and Redfin at 3.0%. On the high end of the spectrum are Fannie Mae at 7.9%, Freddie Mac at 7.0%, and Zillow at 13.6%.
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Home price growth in 2022 to be the slowest in a decade, says Realtor.com