HOUSTON – (By Dale King, Realty News Report) – Barely a month before the calendar flips to 2022, Realtor.com is sticking out its neck and predicting “home sales [will] hit a 16-year high and trends like workplace flexibility [will] enable more homebuyer success.”
Americans will have a better chance to find a home in 2022, but will face a competitive seller’s market as first-time buyer demand outpaces inventory recovery, says the Realtor.com 2022 Housing Forecast.
In addition, with listing prices, rents and mortgage rates all expected to climb right along with personal incomes, 2022 will present “a mixed bag of housing affordability challenges and opportunities.”
That “mixed bag” could get even more confused if Realtor.com expectations prove true. While income is anticipated to rise 3.3 percent, mortgage rates could jump as much as 3.6 percent and rents will surge 7.1 percent, leaving wage gains in the dust. At the same time, listing prices for homes will rise by just 2.9 percent.
The Realtor.com report gives the home price and sales market in the six largest metro regions of Texas favorable rankings for the future. All come in on the positive side, with El Paso leading the pack and Houston pulling up the rear, according to the list of expected results for the 100 largest US metros this coming year.
The prognostication for Texas metros puts El Paso on top with an expected 10.6 percent, year-over-year, sales hike while prices will bump up 4.2 percent.
Next comes the Dallas-Fort Worth-Arlington region, where sales are predicted to rise 8.3 percent while prices increase 4 percent. Third is the McAllen-Edinburg-Mission area where sales are expected to increase 5.9 percent and prices will jump by nearly the same percentage, 5.1 percent.
Settling in closely behind in fourth place is the San Antonio-New Braunfels metro which may come in with a 5.1 percent increase in sales next year as home prices go up 3.5 percent.
Realtor.com says the currently scorching Austin market should cool down some. The prediction for 2022 is a 4.7 percent hike in sales for the Austin-Round Rock area and a 3 percent home price hike.
Houston Home Prices to Rise 2.4 Percent in 2022
Coming in sixth is the Houston-The Woodlands-Sugar Land section with a predicted 2.6 percent uptick in sales while prices jump just 2.4 percent.
Still, rankings on the plus side are good, considering that many parts of the nation — including regions thought to be impervious to sales drops – are showing predicted numbers preceded by minus signs.
These include Chicago-Naperville-Elgin, Illinois, -2.6 percent on the sales chart; New York-Newark-Jersey City, -3 percent and urban Honolulu, Hawaii, -3.9 percent. Even the Cape Coral-Fort Myers area on the southwest coast of powerhouse Florida may see sales drop in 2022 by 5.6 percent.
At least five metros in California are dropping below the zero gradient, including Los Angeles-Long Beach-Anaheim, -1.6 percent and San Francisco-Oakland-Hayward, -5.6 percent for 2022.
“Americans are poised for a whirlwind year of home buying in 2022,” said Realtor.com Chief Economist Danielle Hale. “With more sellers expected to enter the market as buyer competition remains fierce, we anticipate strong home sales growth at a more sustainable pace than in 2021.”
“Affordability will increasingly be a challenge as interest rates and prices rise, but remote work may expand search areas and enable younger buyers to find their first homes sooner than they might have otherwise,” she added. “And with more than 45 million millennials within the prime first-time buying ages of 26-35 heading into 2022, we expect the market to remain competitive.”
“While historically-low mortgage rates helped buyers better manage monthly housing costs in 2021, affordability will be important in 2022 as mortgage rates climb and home prices continue to rise.”
“However, a number of factors will help keep homeownership in reach for many buyers,” says Realtor.com, “including expected income growth of 3.3 percent by year’s-end and declining unemployment, expected to drop from a projected 4.8 percent in the last three months of 2021 to 3.5 percent during the same time period in 2022.”
Shifting workplace dynamics will also create new homebuying opportunities. The new year “will see employees call the shots on issues that will play an increasingly important role in the housing market. As the economy grows and unemployment declines, bigger paychecks will enable buyers to compete even as housing costs rise, while more power to negotiate flexible workplace arrangements will allow home shoppers to explore lower-priced housing markets further from expensive city centers.”
The report says that nearly one-in-five prospective sellers (19 percent) are looking to move because they no longer need to live near the office, up from just 6 percent in the spring.
The report adds that the 2022 for-sale home supply (+0.3 percent) will begin to recover from recent declines, but millennial demand will likely keep supply limited through at least 2025.
Dec, 2, 2021 Realty News Report Copyright 2021
For more about Texas real estate, check out the book Houston 2020: America’s Boom Town – An Extreme Close Up by Ralph Bivins. Available on Amazon http://tiny.cc/4a2g6y
Houston 2020 Ebook version https://tinyurl.com/4xm7z8b5
File: Home sales to hit