What to Expect in 2022

Supply shortages have been the driving force behind dramatic price growth across the country, and certainly in Austin. It appears that mortgage rates will rise this year (up to 4% recently, higher than we have seen for more than two years). That will constrain demand a bit as some buyers struggle to qualify for higher payments. Prices will continue to rise as well but our recent experience shows growth at about half the pace of late 2020 and early 2021. The combination of rising prices and interest rates, should allow the buyers who qualify to face less competition than we saw six months to a year ago.

For more discussion of what to watch for in 2022, here are some very good recent articles on the subject:

National Association of REALTORS®: Contract Signings Slide as Buyers Find Fewer Choices

Redfin: Housing Market Update: Expect Price Growth to Slow, Sales to Stay Flat as Mortgage Rates Approach 4% This Year

Yahoo Finance: Housing market: ‘We characterize’ 2022 ‘as a pivot,’ Fannie Mae chief economist says

MarketWatch: ‘Home price growth may return to normalcy.’ 5 economists and real estate pros predict what will happen in the housing market in 2022

Those national forecasts are encouraging, and there are signs of the Austin-area market calming too, but Austin is still different, being among the first cities in the United States to recover and surpass pre-pandemic employment last year. And the growth continues:

CBS Austin: Austin continues to see exponential job growth as pandemic rages on

KVUE: Austin-area unemployment rate continues to fall, report says

With Apple, Amazon, Tesla, and Samsung and many other employers expecting very significant growth there’s little reason to think our regional economy will slow in the coming years. Of course, nothing in this kind of forecasting is certain, but all indicators show strength for Austin.

Follow me here and at CentralTexasHomeSearch.com for continuing commentary as the year progresses.