2021 was a record year for home price and home equity growth - but that growth is expected to slow on average in 2022. While every expert has a slightly different prediction for exactly how much, everyone is in agreement: growth is going to slow in 2022.
According to Corelogic estimates, the annual average rise in the national index will slow from 15% in 2021 to 6% in 2022.
National Association of Realtors Chief Economist Lawrence Yun is a bit more bearish. He predicts home price appreciation of just 2.8 percent in 2022.
In contrast, Zillow is only expecting growth to drop to 11% next year.
Whether it’s 11% or 6% or 2.8%, growth will slow toward normalcy. The average annual growth rate is generally 6% on a normal year (5.3% according to CEIC.)
2021 Hottest Real Estate Markets
In 2021, several metro areas saw more price growth than the overall U.S. average. Among these areas were:
- Bellevue, Washington
- Fremont, California
- Scottsdale, Arizona
- San Jose, California
- Rochester, New York
- Pembroke Pines, Florida
- Glendale, California
- Worcester, Massachusetts
- Boise, Idaho
- Palmdale, California
Bellevue, Washington homes prices, for example, were up over 20% in 2021, as were home prices in Fremont, California.
While home prices don’t fully reflect long-term value - they are a good indicator of what people are willing to pay to purchase homes in a certain area. Some of these areas are poised for even more growth in 2022.
2022 Hottest Real Estate Markets
According to Realtor.com, these will be the hottest real estate markets in 2022:
If you live in Boise, Idaho or Salt Lake City, Utah - congrats! Your home is poised to increase in value (at least, in the short term.)
However, even if you’re living in an area poised for slower growth in 2022 - prices probably are not going to go down, according to experts.
2022 Coldest Real Estate Markets
According to Realtor.com, these will be the coldest real estate markets in 2022:
- Hartford, Connecticut
- Honolulu, Hawaii
- New Haven, Connecticut
- Scranton, Pennsylvania
- Baton Rouge, Louisiana
- St. Louis, Missouri
- North Port, Florida
- Tulsa, Oklahoma
- Chicago, Illinois
- New York City, New York
Even the market with the most modest price growth (Honolulu, Hawaii) will still grow, just at a predicted 0.2%, according to Realtor.com.
See the full list of the top 100 markets that Realtor.com looked at.
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By Lucas JonesLucas Jones has over a decade of experience in the lending and financial service industries. He’s a licensed broker, and holds a Bachelor’s Degree in Economics from Rutgers University. He is the head of operations at Renofi. Lucas holds NMLS #956544 and is a Certified Encompass Administrator. Lucas’ experience in mortgage lending is the bedrock for RenoFi’s risk logic, mortgage manufacturing process, and partner lender development.
I'm Lucas Jones, a seasoned professional with over a decade of expertise in the lending and financial service industries. My extensive background includes being a licensed broker, and I hold a Bachelor's Degree in Economics from Rutgers University. Currently, I serve as the head of operations at Renofi, where I leverage my comprehensive knowledge and experience to contribute to various aspects of the mortgage lending industry.
Now, let's delve into the article about the real estate market trends in 2021 and the projections for 2022. The author discusses the remarkable growth in home prices and home equity throughout 2021, setting a record year. As an expert in the financial services sector, I can affirm that such trends are crucial indicators of economic health and consumer confidence.
One key point highlighted is the anticipation of a slowdown in home price and equity growth in 2022. CoreLogic estimates a significant deceleration, projecting the national index's annual average rise to slow from 15% in 2021 to 6% in 2022. Lawrence Yun, Chief Economist of the National Association of Realtors, provides a more conservative prediction of 2.8% home price appreciation for 2022. Zillow falls in between, expecting a growth drop to 11% in the coming year.
These predictions align with the common understanding that the real estate market experiences cyclical patterns. I would like to emphasize that these forecasts are based on various economic indicators and data analytics, emphasizing the need for a nuanced understanding of the real estate landscape.
The article further identifies the hottest real estate markets of 2021, such as Bellevue, Washington, and Fremont, California, both experiencing over 20% growth in home prices. This information reflects the dynamic nature of the real estate market, where specific regions outpace the national average.
Looking ahead to 2022, Realtor.com identifies Boise, Idaho, and Salt Lake City, Utah, as the hottest real estate markets. Even in areas projected for slower growth, experts suggest that prices are unlikely to decrease. This aligns with my knowledge of economic principles, where housing markets tend to be resilient even in the face of slowdowns.
On the flip side, the coldest real estate markets for 2022 are projected to include Hartford, Connecticut, and Honolulu, Hawaii, with the least growth predicted in Honolulu at 0.2%, according to Realtor.com. This nuanced analysis reflects the diverse nature of real estate markets across different regions.
In conclusion, my expertise in the lending and financial service industries supports the understanding of the real estate market dynamics presented in this article. The predictions for 2022, the analysis of hot and cold markets, and the emphasis on the likelihood of growth, even if modest, resonate with my extensive knowledge in these fields. If you're considering entering the real estate market or exploring renovation options, understanding these trends is essential for making informed decisions.
