The race for U.S. homes still has significantly more room to run, according to a new forecast from Realtor.com.
Home sales in 2022 are predicted to rise 6.6% year over year, reaching a 16-year high, data from the listing portal showed.
Although increased inventory will give U.S. home buyers more options in 2022, they will still face fierce competition, record-high listing prices and fast-paced sales, according to the report Wednesday.
“Whether the pandemic delayed plans or created new opportunities to make a move, Americans are poised for a whirlwind year of home buying in 2022,” Danielle Hale, Realtor.com’s chief economist, said in the report. “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.”
Existing inventory is expected to tick up 0.3% next year, in contrast to the 18% drop registered in 2021, the report said. Additionally, housing prices are likely to grow at a more normal pace, with the median home price predicted to rise 2.9%, compared to the 12% increase in 2021.
Still, Ms. Hale said,“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.”
In 2022, more than 45 million millennials will be between the ages of 26 and 35, the prime age range for first-time buyers, the report said.
Because of that, “we expect the market to remain competitive,” Ms. Hale said in the report.
Of the 100 metro areas tracked by Realtor.com, Salt Lake City is predicted to see the biggest jump in sales in 2022—15.2% year over year. That’s followed by Indianapolis, where sales could rise as much as 14.8%, and Columbus, Ohio, which could see a 13.7% increase.
Portland, Maine, is expected to see the most robust price growth next year, 10%, the data showed. Providence, Rhode Island, is predicted to have the second highest growth, 9.5%, followed by Salt Lake City, 8.5%.
Mansion Global is owned by Dow Jones. Both Dow Jones and Realtor.com are owned by News Corp.