In a recent February firsttuesday poll, we asked readers to express what direction they sense home prices will go in 2022.
The results were intriguingly varied, but one answer came out definitively ahead with the highest percentage of votes.
According to our results:
- 47% of readers said home prices will flatten out in 2022;
- 37% said home prices will rise again as they did in 2021; and
- 16% said home prices will fall.
We asked readers a similar poll in 2021, and the answers included:
- 39% saying home prices would continue to rise;
- 32% saying home prices would start to decline; and
- 30% saying home prices would flatten.
The prior 2021 poll was much more split in reader consensus, though leaned towards home prices rising – whereas 2022 readers voice a more unified conclusion that home prices will flatten out in 2022. 2021’s rapid pace of sales will not be sustained in 2022.
Throughout 2021, California saw home prices continuously rising – November of 2021 also saw rising prices, but at a much slower pace than the prior months. The rapid pace of sales experienced since mid-2020 continues, though is losing steam as we move forward beyond the beginning of 2022.
As interest rates continue to rise, home prices are expected to fall within months. Today’s high home prices are expected to lose momentum later in 2022 – a result of low support for interest rates, the long-term effects of job losses, and the higher levels of mortgage delinquencies.
Inventory remains at a record low – forcing rapid competition between FOMO buyers. Like the opposing ends of a teeter-totter, as interest rates go up, buyer purchasing power will go down. As a result, home prices will flatten then quickly decline.
