2021 was a record year for home price and home equity growth - but that growth is expected to slow on average in 2022. While every expert has a slightly different prediction for exactly how much, everyone is in agreement: growth is going to slow in 2022.
According to Corelogic estimates, the annual average rise in the national index will slow from 15% in 2021 to 6% in 2022.
National Association of Realtors Chief Economist Lawrence Yun is a bit more bearish. He predicts home price appreciation of just 2.8 percent in 2022.
In contrast, Zillow is only expecting growth to drop to 11% next year.
Whether it’s 11% or 6% or 2.8%, growth will slow toward normalcy. The average annual growth rate is generally 6% on a normal year (5.3% according to CEIC.)
2021 Hottest Real Estate Markets
In 2021, several metro areas saw more price growth than the overall U.S. average. Among these areas were:
- Bellevue, Washington
- Fremont, California
- Scottsdale, Arizona
- San Jose, California
- Rochester, New York
- Pembroke Pines, Florida
- Glendale, California
- Worcester, Massachusetts
- Boise, Idaho
- Palmdale, California
Bellevue, Washington homes prices, for example, were up over 20% in 2021, as were home prices in Fremont, California.
While home prices don’t fully reflect long-term value - they are a good indicator of what people are willing to pay to purchase homes in a certain area. Some of these areas are poised for even more growth in 2022.
2022 Hottest Real Estate Markets
According to Realtor.com, these will be the hottest real estate markets in 2022:
If you live in Boise, Idaho or Salt Lake City, Utah - congrats! Your home is poised to increase in value (at least, in the short term.)
However, even if you’re living in an area poised for slower growth in 2022 - prices probably are not going to go down, according to experts.
2022 Coldest Real Estate Markets
According to Realtor.com, these will be the coldest real estate markets in 2022:
- Hartford, Connecticut
- Honolulu, Hawaii
- New Haven, Connecticut
- Scranton, Pennsylvania
- Baton Rouge, Louisiana
- St. Louis, Missouri
- North Port, Florida
- Tulsa, Oklahoma
- Chicago, Illinois
- New York City, New York
Even the market with the most modest price growth (Honolulu, Hawaii) will still grow, just at a predicted 0.2%, according to Realtor.com.
If you’re on the hunt for a home in one of the hottest markets (or one of the coldest), you can still afford to renovate with a RenoFi Loan, right when you’ve purchased your home.
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