What’s Happening with Home Prices This Year?

What’s Going To Happen with Home Prices This Year?

After almost two years of double-digit increases, many experts thought home price appreciation would decelerate or happen at a slower pace in the last quarter of 2021. However, the latest Home Price Insights Report from CoreLogic indicates while prices may have plateaued, appreciation has definitely not slowed. The following graph shows year-over-year appreciation throughout 2021. December data has not yet been released.

As the graph shows, appreciation has remained steady at around 18% over the last five months

The news on housing is not what it seems. The FHFA Reports all nine regions of the country still experienced double digit appreciation, but if you look closer there's been a slight deceleration from last year - just not at levels expected by most people! However those same reports also indicate continued strong price growth throughout America and many metros are seeing prices rise even faster now than before .

Why Haven’t We Seen the Deeper Deceleration Many Expected?

Experts projected that supply of housing inventory would increase in the last half-year and buyer demand decreased, as it historically does later on. Since all pricing is subject to change with time being an important factor when looking at values or appreciation rates under these conditions experts had thought buying prices might dip slightly less than they did before but this turned out not be true at all; buyers still wanted homes even though there were fewer available options for purchase!
It seems like home sellers are getting more anxious about keeping their properties off market so I wouldn't be surprised if we see increased competition among parties wanting different types.

Here are three reasons why the number of active listings didn’t increase as expected:

1. There hasn’t been a surge of foreclosures as the forbearance program comes to an end.

2. New construction slowed considerably because of supply chain challenges.

3. Many believed more sellers would put their houses on the market once the concerns about the pandemic began to ease. However, those concerns have not yet disappeared. A recent article published by com explains:

“Before the omicron variant of COVID-19 appeared on the scene, the 2021 housing market was rebounding healthily from previous waves of the pandemic and turned downright bullish as the end of the year approached. . . . And then the new omicron strain hit in November, followed by a December dip in new listings. Was this sudden drop due to omicron, or just the typical holiday season lull?”

Home price appreciation might slow (or decelerate) in 2022. However, based on supply and demand, you shouldn’t expect the deceleration to be swift or deep.

Lamont "Ben" Orr - The Orr Team eXp Realty 720-425-3365

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