Whether you’re a potential homebuyer, seller, or both, surely this question matters for you. Many people are wondering: will home prices fall this year? Let’s break down what’s happening with home prices, where experts say they’re headed, and how this impacts if home prices fall this year.
What’s with the home prices this year?
Home prices were observed to have 121 months of year-over-year increases. As Core Logic states:
“Price appreciation averaged 15% for the full year of 2021, up from the 2020 full year average of 6%.”
So why is there a significant increase in price? Supply and demand. It’s because there are more buyers than there are homes for sale. Since homes for sale are a hot commodity in today’s low-inventory housing market. This imbalance is expected in order to maintain that upward pressure on home prices. It is unlikely to happen that home prices fall this year.
Where Do Experts Say Prices Will Go From Here?
Due to that ongoing imbalance between supply and demand, experts say the housing market isn’t set up for a price decline. In the latest home price forecasts for 2022, they’re calling for ongoing appreciation throughout the year (see graph below):
The 2022 projections show price gains will remain strong throughout this year, while the experts are forecasting more moderate price appreciation. First American explains it like this:
“While house price growth is expected to moderate from the rapid pace of 2021, strong home buyer demand against a backdrop of historically tight inventory of homes for sale will likely keep appreciation positive in the coming year.”
What Does That Mean For You?
The obvious takeaway is that none of the experts are projecting depreciation. Meaning, home prices will not go down anytime soon. If you’re a homeowner and planning to sell, the higher price appreciation over the last two years has been great for your home’s value, but it’s also something you should factor in your next steps.
If you happen to be buying a home after selling your current house, do not wait for prices to fall. Waiting will only cost you more in the long run because climbing mortgage rates and rising home prices will surely impact your next home purchase. Freddie Mac says:
“If you’re thinking about waiting until next year and that maybe rates are higher, but you’ll get a deal on prices – well that’s risky. It may be more advantageous to purchase this year relative to waiting until 2023 at this time.”
Bottom Line
Experts say prices will continue to appreciate this year. If you’re thinking of selling to move up, you shouldn’t wait for prices to fall. This means buying your next home before prices climb further may be the best move with financial sense. Let’s connect to begin the process of selling your current home and looking for your next one before prices rise higher.
