Last Minute Housing Market Predictions 2022 That Will Make You Think Twice!

Depending on where you look, you’re getting a lot of mixed signals about the Housing Market in 2022. 

Everything from Goldman Sachs saying home prices will rocket another 16% to the National Association of Realtors stating the housing market is likely to “normalize” with 5.7% home appreciation by the end of the year. 

And of course, there are always the broken records of how the real estate market will come crashing down, just like Chicken Little foretold the sky is falling.   

Look, I know you’re busy, and I appreciate you clicking on this post, so let’s just dive right into the Top 7 housing marketing predictions for 2022.  After you read the "cliff note version," if you want to know how I got there, grab a snack, get comfortable and read on! 

Or, if you prefer, you can watch me explain the predictions in this video.  

Top 7 Housing Market Predictions 2022 (Summary View)

Prediction #1:  Mortgage interest rates 

The average mortgage interest rates for a 30-year fixed-rate mortgage will increase to 3.75%-4.25% by the end of 2022.

Prediction #2:  Housing Affordability

Housing affordability will continue to get worse.  Why?  Already high home prices exceed what the average home buyer can afford.  As a result, Housing Affordability is at the lowest point since 2008.  Home affordability will only get worse as mortgage interest rates go up.  More on this later.

Prediction #3:  Housing Supply 

Expect a gradual increase in the supply of homes by the end of 2022.  The uptick in housing supply will likely become more noticeable around the 3rd & 4th quarters of 2022.

Prediction #4:  Home Price Forecast 

For the home price forecast, I believe the real estate prices could go appreciate 3% YoY or DEPRECIATE 3% by the end of this year. I’ll discuss why the market could go up slightly or down later.  

Prediction #5:  Rental Prices

According to the National Association of Realtors, or NAR for short, monthly rental prices will continue to rise, possibly as much as 7.1% by the end of the year.

Prediction #6:  Market Conditions 

The insane bidding wars in 2021 will slow down and phase out, on average, as the year progresses in most real estate markets.  

Prediction #7:  Migration Patterns

People will continue seeking out more “affordable” housing markets across the united states.  The great migration continues to the mid-west, south, and rural areas of the US.  Plus, it’s taking a twist too.  You’ll see why later.

Unforeseen Considerations 

Now, let’s be honest.  Unforeseen factors are always a consideration when making a real estate predictions list.  So here are 3 things to watch out for as the year progresses. 

1.   Any new economic policy changes that might affect mortgages and housing. 

2.   If any other COVID mutations, like Omicron, come out.  Let’s hope not, so please be responsible and stay safe.

3.  Acts of God like mother nature or global strife. 

Please keep in mind I don’t have a crystal ball for the future.  The predictions I’m sharing with you are backed up with facts I go into below. 

How the Housing Market Impacts You in 2022

Now, if you must go, it’s ok.  Thank you for stopping by my blog!  But, if you have a few moments, allow me to share with you how these predictions impact you.

If you’re buying a home this year, you need to be prepared.  Here are 3 action steps to help you.

Action Step #1 - Get your financial ducks in a row and ready to go.  To better help out, there’s a freebie download of mortgage tips to help you get started. 

Action Step #2 - Gain clarity on what home means to you.  Think through what compromises you’re willing to make, and which ones are non-negotiable. 

Action Step #3 - Hire the right agent to help navigate the fast-moving real estate market. 

If you’re selling a house, this year could be the top of the rollercoaster ride before it starts going the other way.  So, enjoy the view from the top while you still can.  This view comes into focus with generous offers, fewer buyer concessions, and selling quickly in most cases for the best price possible. 

Whether you are buying a home, selling a house, or doing both, it will take having the right agent on your team.  Fortunately, finding the right agent for you is pretty easy to do with the right help.  If you're you're in the Las Vegas area, click here to get in touch with me. 

If you're not in the Las Vegas, NV area then my friends at home and money have an enthusiastic concierge team dedicated to your success.  They will help match you with the right realtor based on what’s important to you.  Check them out.  Why not, it’s free to use.

Either way, the choice is yours.  Please make it a well-informed choice that is right for you, for the reasons important to you!

Now, if you’re ready to unpack the predictions and see how I got there, go grab that snack and get comfortable.  Here we go!

Top 7 Housing Market Predictions Explained!

Prediction #1 Explained:  Mortgage interest rates

What do you think will happen if mortgage interest rates go up to 3.75%-4.25% this year? 

According to a recent Redfin survey, they found “nearly half of buyers would feel more urgency (to buy a home) if rates passed 3.5%.” 

A Forbes article cited the mortgage rates forecast of 3 leading chief economists to back this up.   Their mortgage rate forecast ranged from 3.4% to 4% by the end of 2022. 

Now, if you’re planning on buying a home this year, how will higher mortgage rates impact your home buying plans?

Ok, so when many of us hear that rates are going up, it can give us that “fear of missing out” feeling that we will lose a great deal if we don’t act now.

Let’s face it when we’re planning on buying something big, like a car or a home, every increase in the rate; we will feel the pinch in our purchasing power.   We know that when interest rates increase, we’ll suffer the pain in our monthly budget as we pay more than if we took the lower rate for the same thing. 

It’s almost like we start smashing some kind of panic buying button.  That’s not good, but what is good is sharing this post with your friends!  Thank you.

So, here’s what I’m going to ask you to do.  Before you smash that panic buying button, like someone at a Las Vegas casino hitting max bet hoping to the jackpot; I’m asking you to take a deep breath, take a step back and reassess your situation to clarify what’s most important to you for the reasons important to you.  A calm mind always makes well-informed decisions, while a chaotic mind will usually make poor impulsive decisions. 

Alright, let’s talk about what this means to you.  But, first, let’s shed light on what you’re hearing and seeing about mortgage rates right now.  To do so, we first need to take a quick look back to where mortgage rates were pre-covid and the monetary policies enacted that bring us to the present day. 

Before COVID, mortgage interest rates were hovering around 3.74% in Dec 2019 for a 30-year fixed-rate mortgage, as we can see on the Freddie Mac Primary Mortgage Market Survey below.  In that same year, in 2019, the year started with mortgage rates around 4.45%, a level that seems crazy today.   It might come as a surprise, but the FED said they planned on raising rates once or twice in 2019.   So why did the rates drop?

Freddie Mac PMMS- Dec 2019 30-Year Fixed Mortgage Rates

In short, because the US economy was stalling.  So, the FED stepped in to curb the impact of a weakening US economy using what’s called an “expansionary monetary policy.”  For a quick lesson about what that means, let’s turn to our friends at Investopedia. 

Investopedia tells us that an expansionary policy" is intended to prevent or moderate economic downturns and recessions.”   So what did we feel in our everyday life when that happened?  We saw lower interest rates from auto loans, credit card rates, student loans, and lower mortgage rates that made us start thinking now might be the right time to make a big-money move.

So, people previously on the fence about making a big purchase jumped off the proverbial fence with both feet while the rates were low to buy a new car, get a new credit card, or buy their new home to live their best life.

Moving into 2020, the Wall Street Journal posted an article the “US Economy Heads Into 2020 With Steady Growth.”  But, looking past the catchy headline, midway in the article, it also mentioned, “The Yields on 10 year Treasury notes also fell below yields on three-month treasury bills….”  The reason that is important to know is the 10 year US treasury note is a critical consideration in predicting interest rate spikes and declines.

As 2020 was just getting started, we all braced for impact as the World Health Organization “declares the coronavirus outbreak is a global pandemic.”   

To help mitigate the economic fallout from Americans being furloughed from work and losing their jobs.  According to this Brookings article, the resulting economic uncertainty caused the FED to cut the rate to “near-zero” in March 2020.

The FED said the near-zero rates will be in place until “it is confident the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.”  

As 2021 dawned, the Wall Street Journal posted the survey results of 68 economists that believed the “US economic growth will exceed 4% in 2021.”

Ok, so you might be thinking, thanks, Andrew, for the trip down memory lane.  But, what does this have to do with the mortgage interest rates in 2022?  And how will the rates this year affect me?  That’s a good point, my friend! 

Keep in mind everything in life has a balance.  Like yin and yang and what goes up must come down, and what goes down will eventually go back up, so is true with the monetary policies in the United States.  When one policy goes too far, the opposite policy will come into play to rebalance economic cycles.

How long the FED keeps the rate low is one major factor that can cause a higher inflation rate.  To back this up, Fannie Mae posted this piece that the “Economy finishes 2021 Strong; Inflation is Top Risk Concern for 2022.”   

Like a rudder turning on a large ship, it takes a long time to notice the effect.  You see, the economic and monetary policies are like rudders on the ship known as the US Economy.  We’re beginning to feel the impact of the prolonged use of an expansionary monetary policy. 

The FED is likely to implement a “contractionary monetary policy” to cool down the overheated prices.   Our friends at Investopedia tell us the goal of a contractionary monetary policy “is to reduce inflation by limiting the amount of active money circulating in the economy.  It also aims to quell unsustainable speculation and capital investment that previous expansionary policies may have triggered.”

To back this up, CNBC posted, “Goldman predicts the Fed will hike rates four times this year, more than previously expected.”

So, what’s that mean to us?  It means we’ll begin seeing gradually higher interest rates on things like auto loans, credit cards, and mortgages, to name just a few. 

Freddie Mac PMMS- Nov 2018 30-Year Fixed Mortgage RatesNow I know higher mortgage interest rates might sound like a bad thing, but here’s the reality.  As mortgage rates increase, it could help stabilize the rapid acceleration of home prices we’ve seen in recent years.  In turn, this will decrease the average cost of things we buy every day as the inflation rate drops. 

Suppose mortgage rates get high enough with today’s home prices.  In that case, it could begin to not only decelerate home prices but start exerting downward pressure on home prices towards the end of this year.  More on that is coming up in the Home Price Forecast in just a bit.  

So, based on this information, is why it seems likely mortgage interest rates might climb up to 3.75%- 4.25% by the end of the year. If the rates do go up, it’s essential to remember that mortgage rates are still low looking back over the past four years.  This chart by FRED economic data shows that the average rate for a 30 year fixed rate mortgage was 4.94% in Nov 2018. 

It’s worth noting I’ve been talking about the mortgage rates for primary home loans, not for second homes and investment properties. 

The rates and costs for second homes and investment properties will increase.  Expect to hear more about that around April 1st, when the new rates and costs are announced.

Prediction #2 Explained:  Housing Affordability

Throughout 2021, every week, we saw posts like this one from CNBC as home prices hit ever-escalating record highs.  Redfin Housing Data- Dec 2021

To back it up, Redfin housing data shows the average price of homes increased 15.2% year over year nationwide by Dec 2021.  With a median sales price of $382,813 nationwide as of writing this article.

So, what does this mean to you?  Based upon your monthly income and debts, you know what is financially comfortable to you or not.  So, here’s what I’m asking you to do.  First, always stay true to yourself.  Second, think things through to make well-informed decisions that are right for you, for the reasons important to you financially or otherwise.

Ok, let me back up why home affordability is more of an issue than it may seem and how it’s likely to affect you and the real estate market at large. 

So, when you’re looking at housing affordability in its purest form, there are 3 main data points we need to gather.  First, we need to know the current median income per household; second, the current median sales price for homes; and third, the current trending mortgage interest rates. 

So, let’s pack it up and hit the internet trail together to find the facts.

In 2021, according to a website with oodles of data curiously named don’t quit your day job.” They found the median household income in the US was approximately $67,463. 

Redfin’s housing market overview shows the average median sales price of a home around $382,890.

This chart by FRED Economic data shows the current fixed-rate mortgage is averaging around 3.56% as of writing this article.

Alright, that was a fun trip together, gathering the data points we needed.  It also gave us some pretty cool BRoll for this video above.  But what good is data unless we can make it fun and show you how to use it in your everyday life. 

So, let’s bring it all together now using a couple of sites.  I linked these sites in the description of this video for your convenience.

We’ll first stop by our friends at Nerdwallet to use their home affordability calculator. 

Now, let’s use the data we collected to see how much home is truly affordable to the average American household.  For fun, let’s give the average American household members names.  We’ll call them James and Mary. 

Of course, you can customize the details with your information to gain clarity on your situation.  But, for now, we’ll focus on James & Mary’s scenario. 

Starting at the top, we’ll enter our location.  Let’s say James & Mary live, work, and play in Las Vegas like me. 

From there, look to the right and go down to “income and debts.”  For household income, we’ll use the $67,463 we found earlier.

Next is the total minimum monthly recurring debts like credit cards, student loans, car notes, etc.  Let’s say James & Mary have $400 monthly recurring debts.  Which seems relatively normal for a lot of people I’ve helped.  Of course, individual debt obligations will vary.  We’re just keeping it simple here for this example.

Ok, so let’s assume James & Mary have average credit.  Let’s edit the rate to 3.56%, which is the current average fixed-rate mortgage we learned from FRED economic data earlier.

Now let’s go to loan details.  Let’s assume James & Mary have worked hard and saved up $20,000 for their down payment.  Now, let’s look to the left to see how much home loan is affordable in this scenario. 

In this case, it looks like James & Mary can comfortably afford a home up to $248,922.  According to Redfin’s housing data, that’s quite a bit lower than the median sales price of $382,890 for a house.

 Now there is one thing I didn’t tell you about James & Mary…  Mary is pregnant with baby #1.  Their 900sqft 2 bedroom, 1 bathroom apartment with a carport no longer fits their lifestyle or life goals.

So, what options do James & Mary have?  Well, depending on the loan type, they might have the ability to increase their total debt to income ratios you see on the affordability slider.  For example, if they stretched themselves, they might get approved for $302,754.  Yet nerd wallet suggests an ideal number from the current prices of homes in Las Vegas is $357,448. 

I wonder what kind of compromises James & Mary will have to make to buy a home of their own?  What would you be willing to do in their situation?  Let us know in the comments below.  Thank you.

Ok, back to James & Mary.  This is where James & Mary need to consider their financial comfort zone carefully, so should you.  If they slide into the aggressive range, they could potentially max out around $360,830.  But it comes with a tradeoff.  Their total monthly mortgage, an estimated $2,406, plus their minimum monthly debts will consume 50% of their total monthly gross income, aka pre-tax income. 

James and Mary’s situation is not unlike many Americans.  Average or otherwise.  When facing a significant financial decision, like buying a home, clarifying what’s most important to you is imperative.   So, here are four questions to think through. 

1.  What does home mean to you? 

2.  How long do you plan on living in the home you buy? 

3.  What compromises are you willing to make to achieve your home buying goals?  

4.  Is now the right time in your life to buy a home? 

Only you truly know the answers to these questions. 

One thing to keep in mind is mortgage rates are going up.  As the rates climb, it will diminish your purchasing power.

Gaining clarity on your reasons why you’re buying a home of your own now will help you succeed when the time is right for you to buy a home for the reasons important to you.  Be true to yourself always.

To further illustrate how monthly mortgage payments change as mortgage rates climb, let’s check out this slider courtesy of Redfin.  Redfin Slider- How Mortgage Rates Change Monthly Payments

Let’s use Fred Economic Data’s current fixed-rate mortgage of 3.56%.  This time, we’ll use the $500,000 home price as an example.  Let’s find 3.56% on the line.  It looks like we’re at $2,535 in monthly mortgage at a 3.56% rate.  Of course, that’s assuming the criteria Redfin is using is met.  

So, if mortgage interest rates are going up, how much will that change your monthly mortgage payment?  Let’s find out. 

At 3.75%, the rate adds around $50 to the monthly mortgage.  

At 4%, the rate change would add $105 to the monthly mortgage. 

And at 4.25%, the monthly mortgage goes up to $2,695. 

That’s a difference of an added $160 per month for the same home price, adjusting for the interest rates.  That $160 equals an extra $1,920 in increased annual expenses.

That begs the question, how much money does a household need to stay under the stretch mark to buy a house at today’s prices?  Let’s see.  Let’s assume James & Mary got promoted, and their new household income is $100,000 per year.  Keeping all the rest of the criteria we used the same, now they can afford a house up to $396,479 without “stretching” their budget. 

That made me wonder, and maybe you too, just how many households actually earn $100,000 or more per year?

Our friends at don’t quit your day job have the answer.  Approximately 33.5% of US households earned $100,000 or more in 2021.  To put it another way, that’s roughly 43,588,408 households in the United States earning $100,000 or more annually.

I wonder, how many of those households already own a home?  I suspect most of them already own a home and won’t be selling this year unless it’s for an excellent reason.  Perhaps a job relocation or another major life event not related to trading up homes.  

Prediction #3 – Housing Supply

That brings up prediction #3 – housing supply. 

We all know the primary elements of supply and demand.  In short, prices go up when demand is high, and supply is low.  Conversely, when supply is high and demand is low, prices go down until the supply and demand balance. 

Then the cycle repeats itself again like a never-ending YouTube video, perhaps like this one.  But I assure you, your patience and attention will be rewarded.

Currently, the United States faces an unprecedented supply shortage of homes to meet buyer demand.  CNBC reports, “America is short more than 5 million homes, and builders can’t make up the difference.”

To back up the article, the active listing count in the United States is currently hovering around 483,266 homes for sale nationwide, according to FRED Economic Data as of the date of writing this article. 

Like adding salt to a wound, large investment firms are buying what is considered affordable homes throughout the United States. 

I guess these uber-wealthy corporations prefer us to be a Renter Nation instead of living our best life pursuing our own American Dream.  It’s almost like these firms are running some kind of America for Rent scheme, and we’re left out in the cold without a coat.  That’s just not cool, and all for money. 

So how many homes might sell in 2022?   Zillow projects 6.57 million total homes will sell this year.  This is up from the estimated 6.1 million total homes sold in 2021. 

Even though we can all agree there is no shortage of home buying demand.  There is an abyss of affordable homes, especially for first-time homebuyers.  

So, what’s this mean to you?  With home prices already at all-time highs and mortgage rates going up, it’s very likely, this is the catalyst that will cause an uptick in housing inventory as the year progresses.  Why? 

The reality is many would-be home buyers are fatigued by the overheated real estate market.  Frankly, being priced out of the market like James and Mary from prediction #2 really sucks.   Especially when they worked so hard to save up for a down payment and buyer closing costs to get a house. 

So, let me know in the comments, can you relate to this post by USA Today?  “It’s just draining:  Homebuyers frustrated by a cutthroat housing market putting their searches on hold.”

Some say buyers on the fence will hit the panic buying button as mortgage rates increase.  So, my question to you is will it be you hitting that panic buying button?  If so, curious minds would love to know, so drop your comments below.

Another thing to remember is what happens if the bidding wars are anything like they were in 2021.  In 2021 the bidding wars were ferocious.  Most homebuyers in the hottest metros, like the Las Vegas area, bid over list price by 7%+ in the face of fierce competition.  They did this to beat out the large inflow of people flush with cash coming from other states. 

Here’s where the reality gut check comes into play.  If the price of homes exceeds what a buyer can pay, what happens to home prices? 

At a minimum, the price growth, aka appreciation, must slow down.  So, mark my words; you’ll hear more news and see more posts about the housing market cooling as the year progresses.  Buyer demand is high, but the number of home buyers who can buy is lower than meets the eye. 

As the year progresses, you’ll hear many “experts” using 3 Dollar words to describe the housing market this year.  These words will be tossed around like chips on a Las Vegas poker table.  The 3 dollar words sound like “normalize,” “decelerate,” “moderate,” “taper,” “calm,” “cooling,” “stabilize,” “settling,” “balancing,” and “re-calibrating,” to name a few.

Of course, this also means the fear-mongering clickbait about a looming housing crash will likely come around with renewed vigor.  So please, someone, pour me a triple! 

Seriously, please don’t buy into nasty fear-mongering clickbait; you’ll only get hurt.  Besides, you’ll always get the truth from me, whether it’s what you want to hear or not.

Please remember the best time to buy a home or sell a house is when the time is right for you in your life for the reasons important to you.  Real estate markets will always go up, down, and all around.  Don’t try to chase the market, or the market will chase you right out of it.   Be true to yourself.

When the time is right for you to buy a home of your own, you’ll know in your mind, heart, and soul.  Of course, you’ll also want to have a top-notch realtor on your side. 

So save this link for when the time comes and let my friends at Home & Money give you concierge service to find the best realtor to help you achieve your goals.  The link is in the description below. 

Prediction #4 – Home Price Forecast 

Ok, the first 3 predictions set up prediction #4 – the home price forecast for this year. 

Earlier in this post, we touched on many sources that believe the average price of homes will go higher this year. 

Look, to be honest, I’m just not bullish about home prices this year, nor am I some bear hibernating in the forest somewhere.  However, I am pragmatic about the facts we’ve covered together to this point.  

Unlike Goldman Sachs’s 16% price increase projection, or Zillow’s 11% home price forecast, which I think is crazy!   

So, what I believe will happen, is the overall housing market will surely “decelerate” and possibly go negative this year for the reasons already mentioned and those coming up.  

Of course, I’m also leaning on my experience as a full-time practicing realtor in Las Vegas who works with people every day to buy their home and sell their house.  So, I hear you, and I’m here for you!

So will the real estate market go up, or will it go down? 

It looks pretty likely that the housing market could have a shot to appreciate by 3% only because of the lack of current housing inventory in the face of high buyer demand.  

Even Redfin has a similar opinion projecting a “more balanced housing market in 2022,” and “by winter, higher mortgage rates along with already high homes prices will likely slow annual price growth down to around 3%. 

At the same time, the housing market could trend down, shaving up to 3% or slightly more off today’s home prices.  This could happen because of the higher mortgage interest rates and the already unaffordable homes for millions of would-be home buyers getting priced out of the market.  The amount of priced out homebuyers is growing every day!

Consider, for a moment, this article by Fortune, “Rising mortgage rates would kick some homebuyers out of the market and could put downward pressure on home price growth.” 

Or this Kiplinger letter that reports housing price growth is slowing down and will cool over the next few months.

So that brings up a fundamental question about the honest truth of the housing market… It goes back to affordability.  

If the average home buyer cannot afford the average price of a home, what happens to the price?  Will it go up, or will it go down?  We all know the laws of supply and demand state the price must come down to balance with the price a buyer can afford.

Now, think about what we’ve seen over the past few years.  How often have you heard about the historically low mortgage interest rates and unchecked home appreciation?   The way I see it, it’s like stretching a rubber band on your wrist to the breaking point. 

If the tension isn’t released, then the rubber band will stretch and stretch until it reaches its breaking point and, like my friend Eminem says, snap back to reality, ope there goes gravity!  

Ok, so full disclaimer here, Eminem doesn’t know who I am.  Though I like to think we’re friends.  Many of his lyrics resonate with me, and I truly appreciate him and his music.  So, if you do to, give a shout-out in the comments.  Thanks. 

Let’s get back to reality.  The rubber band in our analogy is the US Housing Market.  The tension is elevated home prices, lack of affordability, housing inventory shortage, high home buyer demand, and increasing mortgage interest rates. 

So, you might be wondering if that means a “housing crash” is coming? 

No, not at all.  It does mean that homes prices must re-align with what the average American, like James & Mary from prediction #2, can realistically afford.   If it doesn’t do that this year, the tension in the rubber band will become stronger, and the pop will be harder in 2023.  And that’s a topic for another time.

For now, let’s talk about what this means to you.

If you’re buying a home this year, get your financial ducks in a row and ready to go.  Gain clarity on what home means to you, what compromises you’re willing to make, and which ones are non-negotiable.  It’s also valuable that you have the right agent helping you navigate the fast-moving real estate market. 

If you want some help finding a top agent near you, contact my friends over at home and money and let their care team take care of you.  Check them out.  It’s free, and the link is in the description below.

If you’re a seller, this year could be the top of the roller coaster ride.  You know that top everyone says they wish they knew about and comes with the best views?  In this case, the view comes into focus with favorable offers, fewer buyer concessions, selling quickly, in most cases, for the most money possible. 

Either way, the choice is yours.  Please make it a well-informed choice that is right for you, for the reasons important to you!

Prediction #5 – Rental Prices

So, if you don’t already own a home and you’re not planning on buying a home this year, what options do you have?

Well, you could move in with Mom & Dad, family members, or friends if that’s a possibility for you.  But more than likely, you’ll be looking for a rental if you don’t already have one.  Or, perhaps you’re priced out of the one you do have and now need to find a new place to live.

This post by Forbes titled, “Nowhere To Go:  How Record-High Rent Hikes Have Cornered Renters,” talks about challenges today’s renter faces as home prices soar.  Housing affordability occurs on multiple fronts, not just new home construction and resale homes but also monthly rents. 

This is a massive issue for many millions of people.  To be honest, my heart goes out to you.  I’ve been where you are before, and it’s like being stuck between a rock and a hard place. 

You see, in 2006, I was still serving active duty in the USMC when rental prices were climbing ever higher than what I could afford to pay.  I was in San Diego at the time, of all places to be!  So, what was affordable for me to rent became increasingly tiny.  I ended up in a studio apartment with paper then walls – it was so miserable, living in a pup tent would’ve been preferable. 

So, I feel your pain and understand the catch 22 the current housing market is causing you.  Just know, with time, this too shall pass.

Unfortunately, I don’t have good news for you if you plan on renting this year.  Or…  I might, depending on your point of view.  More on that in a moment.  Zumper- National Rent Report YoY up to Jan 2022

Now, if you’re a landlord, you’re sitting back like a fat cat happily collecting those increasing monthly rent checks.  The National Association of Realtors is forecasting monthly rental prices will increase by 7.1% by the end of the year. 

Suppose you’re planning on making a move and seeking out lower rent.  In that case, Zumper makes it pretty easy to track rental data across the United States.  

So that brings up the question.  What is causing the increased demand for rentals?

To answer that question, the Harvard Joint Center for Housing Studies explains in their report America’s Rental Housing 2022.”  Let’s take a look at page 29 of their study.  They say, “…a steady wave of young adults forming new households will prop up rental demand while skyrocketing home prices continue to price potential buyers out of the homeowner market.” 

Realtor Magazine also published a report of how a “lack of for-sale inventory drives rents higher.”  And even went as far as to share a graphic of how “every state has lost low-rent units since 2011.”  That map is courtesy of the Harvard Joint Center for Housing Studies.

US Map Courtesy of Harvard Joint Center for Housing Studies

Not to be outdone, says, “another reason for the surge in demand for rentals is that many would-be homeowners were thwarted by fast-rising prices and a lack of homes for sale.” 

So, what does this mean to you?  It really depends on you and your point of view.  Here’s why. 

Now, people can easily toss in the towel, throw their hands in the air like they just don’t care, giving up on their dreams and themselves in the process.  Which would be tragic, by the way.

Or they can step back from the chaos to gain clarity into their situation and how to move forward in a way that is best for them.  Sometimes, my friend, it’s during the hard times we become the most creative, and we grow the most.

See, we tend to get clever in the hardest of times.  Sometimes it takes going through the darkness to see the light so we can put together short-term, mid-term, and long-goals road mapping where we want to go in the future and the steps involved to reach our goals.  I share this with you, not as some kind of feel-good inspo. 

No, my friend, I share this with you as someone who has walked that path and crawled along the way at times.  To be honest, I still do.  But what I learned about becoming better is if you take 1 step every day towards a worthwhile goal, you will eventually arrive at your desired destination.  That journey home goes through your soul.  It will challenge you and change you for the better if you learn and grow as you go. 

To put it another way, my friend Heather Torres at Think Media says it like this, “sometimes you have to be under it to get over it.” 

My takeaway from her snappy ditty is that the pressure of being under it forms who we really are inside.  So, when we’re over it, we know who we really are and what we stand for in life.  After all, doesn’t a lump of coal become a diamond but only after it has endured enough pressure first?  Well yeah. 

Look, I’ve really struggled over the past 18 months with some challenges that caused me to realize the best thing I could do for myself was to take a break from creating content.  So, I did.  To be honest, I almost decided to quit it altogether.  But my friend Eddie Pinero from Your World Within reminded me of the fundamental truth in life.   

Now, I’ve watched so many of Eddie’s videos I don’t recall which one he said this exactly.  But what really clicked for me was when he reminded me the world is what you make it.  You will see what you focus on, and when the small stuff feels daunting, it’s because the deep stuff is out of alignment.  That’s the time to rebalance and gain clarity to move forward. 

My takeaway from Eddie’s message is this…  Sometimes, we go to life’s university in the face of adversity.  That’s when we learn the most and often the hard way.  But the lessons learned at the school of hard knocks will always be remembered and applied as we evolve to reach the next level.

So, if you’ve ever felt overwhelmed by life, drop us a line in the comments with your favorite quote or thoughts that helped you get through the hard times so you could enjoy the beauty of life again. 

If you’re still in the dark times, then just know “to the world you may be one person, but to one person you may be the world.”  There’s always a reason to get up and strive to live your best life.  You’ll make it through the hard times, my friend; just keep moving forward. 

When you don’t feel like it, move forward.  When life is going your way, move forward.  And when it isn’t going your way, move forward.  At all times, get up and keep moving forward!

With that in mind, let’s continue.

Now some people have the elasticity to think outside of the box with visibility beyond “traditional housing.”

Consider for a moment this USA Today post about “manufactured houses delivering the American dream amid tough housing market.” 

When people catch the herd mentality virus, they tend to move forward with blinders on.  They don’t see the opportunities popping out along the way.  Look, manufactured homes might be an opportunity for you, or they might not.  Only you will know what’s best for you.  But how will you know about the possibilities if your eyes are closed to the opportunities?   Village Farms Community

So, let’s look at another exciting solution.  Perhaps something like the Village Farm community of tiny homes in Austin, TX, will scratch the right itch that makes you tick. 

Consider this for a moment.  According to CNBC, the national average cost for a tiny house is 87% cheaper than the average price for a typical home, coming in around $52,000. 

Zillow suggests another creative approach to solve the housing shortage, Rubix cube.  Like maybe “more Gen Zers and millennials will buy a ‘second home’ before a primary residence.”  Either as an investment or to live in a few months of the year.

If you’re curious about how this works and pitfalls to avoid, drop me a line in the comments, and I’ll make a video about the pros and cons of buying a second home before your first home.  Turns out, it could have devastating consequences if it’s not done right.  We’ll save that one for another time. 

Let’s get back to the current time.  If more people take a moment to gain increased clarity into how long they plan to live in their new home, they may find it helps put their home search in perspective.   How so? 

Consider this.  Have you asked yourself if a condo or a townhouse will satisfy your near-term needs and lifestyle?   Redfin reports that the closing cap between high rental prices and monthly mortgage payments is narrowing.  They also believe “condo demand will take off” this year. 

So back to you, if you’re trying to figure out how to keep a roof over your head this year, whether you break down and buy one or rent one, let us know what you’re planning to do in the comments.  Thank you.

One thing is for sure when a lack of affordable housing meets a lack of affordable rent, it causes many to move to less expensive areas to live.  So, it’s like some kind of great migration is happening due to housing affordability issues.  We’ll touch on migration patterns in just a minute. 

Prediction #6 – Market Conditions

But first, let’s talk about the real estate market conditions this year.   Redfin highlights the fact homebuyers face a record supply shortage heading into 2022.  

So, while the year may be starting out like 2021, will it continue the same path? 

We know the FED is gearing up to hike rates.  It’s already happening.   Reuters reports that you’ll hear more about the coming rate hikes starting this March.  So, what happens when high mortgage rates and high home prices collide?   For the reasons we’ve covered to this point, 2022 will break loose from the 2021 path as the year goes on.

So, what this means to you depends on if you’re a home buyer or a home seller. 

If you’re buying a home, then be prepared to face bidding wars in the 1st and 2nd quarters of the year.  As the FED gradually hikes the rates, it will offset inflation and chill demand as the year goes on.  As a result, we’ll see the housing market leveling off around the 3rd and 4th quarters as more buyers refuse to pay to play the insane game of overpaying for a house.

If you know you’re going to buy a home this year, then the question is one of timing.  Early on, you’ll see low inventory and very high odds of bidding wars with relatively low-interest rates.  Then, later in the year, you might see more home options with fewer bidding wars yet contend with higher interest rates.  Therein lies the catch 22 uncovered in prediction #2 with James & Mary.  For homebuying ambition, the price of admission is high this year. 

So, if you’re buying a home this year, what will you do?  Will you aim for the lower interest rates or wait for more homes to hit the market and take on the higher interest rates?  Drop us a line below with your game plan.  Thank you!

If you’re selling a house this year, now is the time to sell!  To say it another way, “Get while the getting is good,”  as country artist Bill Anderson sang his way to #5 on the Billboard charts in 1967. 

Ok, so after you do all that "gettin," where do you get to next?  That’s a question to think through before taking action to sell your house.  

For these reasons and those we’ve already covered is why I believe the 2022 housing market will remain a seller’s market while progressively cooling off from its overheated trot in 2021 as 2022 plays out.   Resulting in a turning point going into 2023, perhaps trending to a balanced market.

That raises the question worth asking yourself.  Is now the right time for you to buy a home or sell a house?  Only you know the answer to that question. 

Now, if you want to hear it from another point of view.  Check out this video by Matt Leighton about why he’s not buying a house this year.  Then, to intensify the intrigue, consider the fact Matt is a top-perming, full-time realtor in Arlington, VA! 

Matt is a friend of mine, a fellow YouTuber, and just a wonderful guy all around.  You’re almost done reading this, so check his video out afterward.  You’ll be glad you did. 

Prediction #7 – Migration Patterns

So, we’ve reached the end of our list with prediction #7 – Migration Patterns.  We’ll keep this one short and sweet.

If you’re still with me at this point, thank you for being here.  If you’d be so kind, drop me a line below to let me know.  Thank you.

In 2022, more people are likely to pack it up and hit the road in search of more affordable housing in what could be called the great migration.  Redfin reports, “the share of home buyers looking to relocate is near pandemic peaks.”  Alright, a change of scenery can rejuvenate the soul; that’s cool.  But where is everyone going? 

According to the same Redfin report, many buyers fled expensive states like California, Illinois, and New York.  Instead, they found refuge in places like Miami, Phoenix, Las Vegas, Tampa, Dallas, San Antonio, and Atlanta, to name a few. 

But what’s causing this migration shift?  In part, Zillow reports, “the rise of flexible work options including hybrid and fully remote work will continue to reshape which areas are most in-demand….”

According to, some of the most affordable cities to buy a home this year include Magna, UT; Chalco, NE; Mauldin, SC; Beech Grove, IN; and Portsmouth, VA.

I really appreciate you hanging in there with me to the end of this article.  You’re truly incredible. 

I’m sending you positive vibes everything goes your way!

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