2022 Predictions, Market Report, & Compass News

What to Expect in 2022 With the U.S. Housing Market

According to (U.S. News & World Report), with a housing shortage in 2021, there has been a strong demand for housing in the U.S. that has been increasing. New home construction has slowed down due to labor shortages, supply chain issues, and regulatory practices, resulting in houses not being built fast enough to meet needs and home prices rising. For 2022, we can expect continued high demand and a rise in real estate transactions that may have a slight effect on real estate transactions.

U.S. Housing Market Potential Trends in 2022:

Inventory will remain low
Interest rates will increase
High prices will put pressure on affordable housing
Wage growth will provide stability for buyers
The rental market will grow and be balanced out compared to the last two years
When labor and supply issues die down enough is unclear for new construction.

Twin Cities Region Market

According to (Minneapolis Area Realtors), in the first week of 2022, market data has shown that mortgage rates were at their highest point since May 2020 in the Twin Cities region. This was more than half a percentage point higher than what it was in January 2021. Inventory has decreased while interest rates have continued to increase into the new year, which has had a small effect on buyer demand.

Recent Market Report For the Beginning of January:

New Listings decreased 16.2% to 814
Pending Sales decreased 19.1% to 541
Inventory decreased 22.5% to 4,493

Industry & Market Updates

Check out the recent headlines about the heightened demand for real estate below.

Existing-home sales rose in November, denoting three consecutive months of increases (NAR)
The median existing-home price for all housing types in November was $353,900, up 13.9% from November 2020 (NAR)
Over the past few months, lumber prices have nearly tripled (NAHBNow)
The average rate of a 30-year fixed mortgage has risen to the highest level since May of 2020 – 3.22% (Freddie Mac)