While most of the pandemic has been defined by a red-hot housing market, that trend may begin to slow in 2022. According to projections published in the Fannie Mae Economic and Housing Outlook September 2021 report, sales of new and existing homes will fall by nearly 2% in the next calendar year. While the report projects a rise in new home sales, it states this increase is unlikely to offset the expected drop in existing home sales.
Accompanying this drop in sales volume, Fannie Mae predicts home price appreciation to decrease significantly from highs seen during the pandemic. At its height during Q2 2021, annual home price appreciation swelled to 17.4%. For Q1 2022, projections are set at 12.1%, before dropping even further to 6.8% for Q2.
The report also projects that 2022 will see an uptick in mortgage rates, rising above 3% for the first time since Q2 2020, which may contribute to the lower projected sales numbers.
Source: Fannie Mae Economic and Housing Outlook, September 2021
Photo: iStock.com/Andrii Yalanskyi
