The National Association of Realtors survey of more than 20 top U.S. economic and housing experts has produced some predictions for is ahead of us in 2022: slower housing price appreciation, easing inflation and rising interest rates.
According to NAR, the group predicts that annual median home price will increase by 5.7 percent in 2022, that inflation will rise 4 percent and the Federal Open Market Committee will twice increase the federal funds rate by 0.25 percent.
U.S. GDP is anticipated to grow at the typical historical pace of 2.5 percent, and the 30-year fixed mortgage rate will likely increase to 3.5 percent—still lower than the pre-pandemic rate of 4 percent.
NAR identified 10 housing markets as “hidden gems” that are expected to experience stronger price appreciation relative to other markets in 2022. In alphabetical order, the markets are as follows:
- Dallas-Fort Worth, Texas
- Daphne-Fairhope-Farley, Alabama
- Fayetteville-Springdale-Rogers, Arkansas-Missouri
- Huntsville, Alabama
- Knoxville, Tennessee
- Palm Bay-Melbourne-Titusville, Florida
- Pensacola-Ferry Pass-Brent, Florida
- San Antonio-New Braunfels, Texas
- Spartanburg, South Carolina
- Tucson, Arizona
“The housing sector performed spectacularly in 2021 in many markets, with huge gains achieved in places like Austin, Boise and Naples,” said Lawrence Yun, NAR’s chief economist and senior vice president of research. “Several markets did reasonably well in 2021, but not as strong as the underlying fundamentals suggested. Therefore, in 2022, these ‘hidden gem’ markets have more room for growth.”