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Four Focus on the US Housing Market in 2022

  In 2021, the US housing market became white-hot. Home sales have reached their highest level in 15 years. The U.S. real estate market has experienced a fierce year. In 2021, housing sales reached the highest level in 15 years, with 6 million houses sold. It is expected that the housing market will continue to be "hot" next year, and first-time buyers will face greater challenges. According to data from the Federal Housing Finance Agency, the average house price in the third quarter has skyrocketed by nearly 20% compared to a year ago. This was the largest annual increase in the institution's house price index in history. At the beginning of 2021, the available housing inventory reached its lowest point in history. Houses are being sold at a record rate, and even houses that are not decent can be sold quickly, even at a price much higher than the asking price. And sellers often quote in full cash.

  It can be said that the real estate industry in the United States was white-hot in 2021. CNN experts predict four focus on the US housing market in 2022:

Record low mortgage interest rates are no longer

  The interest rate in early 2021 was the lowest ever, and the average interest rate on a 30-year fixed-rate mortgage was 2.65%. But this number did not last long. By April 1, this figure reached its peak this year, at 3.18%.

  Since then, interest rates have been fluctuating. According to data from Freddie Mac, the 30-year fixed interest rate last week was 3.05%. And it can be predicted that in the new year, interest rates will rise further.

  The Federal Reserve has sent several signals that its pandemic monetary policy will end as the agency is working to curb inflation. Ultimately, this will push interest rates up.

  Lawrence Yun, chief economist of the National Association of Realtors (NAR), predicts that by the end of next year, the 30-year fixed mortgage interest rate will rise to 3.7%, but this is still lower than about 4% before the pandemic Interest rates.

  San Francisco Compass broker Allison Salzer (Allison Salzer) said that higher mortgage rates "will have a greater impact on low- and mid-priced home buyers than luxury home buyers."

Inventory continues to be tight

  This year, the low-end market inventory is the most tight. According to data from the real estate data company House Canary, houses priced under US$200,000 are already difficult to buy. The number of available properties this year has fallen by 19% compared to last year, while the annual growth of houses over US$600,000 is 40%.

  Although the inventory situation is expected to improve in 2022, it is not expected to show much improvement. According to Realtor.com's forecast, stocks in 2022 will remain limited, with an increase of only 0.3%.

House prices continue to rise

  In 2021, housing prices increased almost all over the country.

  Existing home sales reached a median price of $353,900 in November, an increase of 13.9% from a year ago, but the price of new homes was even higher. According to data from the United States Census Bureau, new houses reached a median price of $416,900 in November, which is about 19% higher than a year ago, setting a new record.

  It is expected that prices in 2022 will continue to rise at a slightly moderate rate. Twenty top economic and housing experts convened by NAR predict that the median house price will increase by 5.7% next year.

First-time buyers continue to face challenges

  In 2021, all-cash offers prevailed, with few homes available for sale, and soaring prices, pushing many first-time homebuyers out of the market.

  By the end of November, the proportion of first-time home buyers had fallen from 32% a year ago to 26%, which is the lowest level since the National Association of Realtors started tracking in 2008.

  According to NAR data, the inventory of low-priced homes is so tight that the number of sales between $100,000 and $250,000 in November fell by nearly 20%.

  Although new houses are now in use, the prices are mostly beyond the budget of ordinary first-time buyers.