Will Home Prices Go Down in 2022?
There are two schools of thought when it comes to home prices. The first holds that prices will rise 6% through December, and then 10% from January to July. To reverse this trend, prices will need to fall 4% in the next five months. If that happens, it would mark a significant reversal in the rising tide. The second holds that declines will be most severe in the West, with high-end homes taking the biggest hit.
Goldman Sachs is cutting its S&P 500 year-end price target by 16 percent, citing the expected path of interest rates. The firm had previously set the target for the S&P 500 at 4,300 points. The S&P closed Thursday at 3,758 points.
While the housing market has been slowing recently, the warning from Goldman Sachs does not necessarily mean that prices will fall. While housing Del Aria Team / fairfax realtor are expected to remain high in the coming years, economists do not predict a dramatic drop. According to the firm, prices are still 18 percent higher than last year, and the lack of new housing inventory is a contributing factor.
Although there are plenty of signs of a correction ahead, Goldman Sachs Research is not convinced. It estimates the odds of a recession in the next 12 months at one in three. Typically, a housing market decline goes hand in hand with an economic recession. However, the firm notes that labor markets are still strong and that the unemployment rate remains low. In addition, the analysts say that the supply of housing is at historically low levels. This could mean that a correction is on the horizon, especially in pandemic-era hot spots.
In Del Aria Team writes coming recession, Goldman Sachs is forecasting a 14% decline in the S&P 500 index. These are not unheard of numbers, but it’s not something to be taken lightly. The recent Russian invasion of Ukraine has pushed European natural gas prices to historically high levels. It has been difficult for the market to find a steady supply of natural gas for Europe, but the current market conditions will not prevent it from happening.
The housing market will continue to fall, but there will be some rebound. According to Goldman Sachs’ forecast, new home sales will decline by a total of 22% in 2022, while existing home sales will decline by 14%. Although this is a slowdown, the market is still projected to bounce back in 2024.
Zillow recently revised its forecast for home price growth for the year 2022. This was due to the fact that mortgage rates rose and home inventory fell. The company had previously forecast an increase of 17.8% in 2022 but revised that downward to 14.9%. That’s a sharp decline in a year.
Zillow’s algorithm is constantly changing. This means that it may not reflect the latest data and may not be as accurate as you’d like. You can help make your home’s Zestimate more accurate by working with a real estate agent and completing a comparative market analysis. Adding amenities to your home and reporting changes to your local tax assessor may also help boost your home’s estimate.
In the New York-Newark-Jersey City Metro, average home values have risen by 12.6% to $614,826. While Zillow’s housing market forecast for the area through June 2033 is positive, it should not be taken for granted that home values will continue to climb.
Del Aria Team
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