2022 Housing Market Forecast: Boom or Bust?

Warren Oberholser
Warren Oberholser
Published on September 23, 2021

Hi, I’m Warren Oberholser. I’m a realtor in the East Bay Tri-Valley area in Northern California. My goal is to help both buyers and sellers get maximum results for one of their biggest investments, their home.

2022 Housing Market Forecast

In this BLOG, I’m going to discuss what the 2022 Housing Market Forecast is.

There is a lot to cover, so let’s get started. George Ratiu, the senior economist at realtor.com, in an interview with Fortune Magazine stated, “Indeed, prices in 2021 have been skyrocketing, competition has been hotter than ever, and the low supply of houses ensure that many home buyers were paying top dollar all the while mortgage rates sat near rock bottom.”

Per Zillow’s August monthly report, “While the housing market is still hot, there are signs that it is beginning to cool off with the housing inventory starting to be a meaningful recovery.” This translates more homes on the market means more options for buyers and less likely of competition per home. The home buyers next year are going to find a much more normal market, suggests Ratiu, with some metrics starting to swing in the buyers favor.

2022 Housing Market Forecast: What is in store for both buyers and seller?

So how would this translate in our 2022 real estate market?

Will this be a more friendly buyer’s market? Skylar Olson, a former economist for Zillow states, “I would hesitate to ever call a market that would see this decades as a buyer’s market, but with inventory on the rise from its lows, buyers will likely have more and wouldn’t be pitted against one another as much.” So housing experts are starting to see a favorable change for the buyer.

Nicole Bachaud, an economic data analysis at Zillow states that ‘it doesn’t mean it won’t still be a strong seller’s market, but it will be slightly more balanced next year’. And according to George Ratiu, “mortgage rates and financing in general will remain favorable towards buyers. And coupled with improved inventory, I do see the market skewing more in favor of the buyers. So you can expect more housing choices on the market“.

Buyers will likely have more houses to choose from when shopping for your next place. Per realtor.com data for the past three months straight inventory has been rising.

Nicole Bachaud from Zillow states, “which is something we haven’t seen in a really long time so that shows us that things are going to start to balance out a little bit more as we move forward. However, buyers are still likely to pay top dollar for a home next year”. According to Nicole Bachaud from Zillow, “for home prices, we still have really strong on growth, really high numbers and things are still going up, but they’re just starting to slow down a little bit in that progression up

2022 Housing Market Forecast: Zillow predicts a 12% pice increase for 2022

Here are the predictions for home pricing in 2022.

CoreLogic forecast, a 3.2 increase in home prices year over year next June. Others like Zillow are predicting they’ll rise as much as 12% year over year in July 2022.

If there is some good news to take from this, prices will rise at a slower pace compared to this year, not as aggressive as we experienced with year over year 18.6% in prices this June. For the S&P CoreLogic Case Shiller national home price index, Nicole Bachaud states, home price appreciation is likely at the peak and it’s going to start to taper off and come back down towards normal levels. According to George Ratiu from realtor.com, we’ve recently seen several weeks of high single digit price growth compared with the double digit range witnessed earlier this year. To me, that’s huge, he said, because it tells me buyers are, one, getting more options in terms of housing. And two, finally price growth is coming down from that scorching levels we’ve seen.

So expect a more normal real estate pattern. George Ratiu from realtor.com states, “I would say to expect 2022 to provide a more balanced normal landscape. Buyers can also expect to be able to make offers below asking again. That’s part of what we’ve seen historically. That’s a normal market.” The good news that I take from this, buyers will be able to spend more time viewing properties before they put an offer in. Furthermore, they’ll be able to have all their contingencies in place which are investigation, appraisal, and loan. With this more even environment, we should be able to see the move up buyer purchase a home. This is one who needs to sell their existing home for financing.

2022 Housing Market Forecast: Freddie Mac’s forecast is 4% interest rates in 2022

What is on the horizon for interest rates?

As I’ve stated in my previous BLOGS and videos, interest rates are expected to rise as the Fed starts to cut back on their bond purchases. According to Zillow, currently the 30-year mortgage rate is hovering around 2.9%. By the end of next year, mortgage rates could hit nearly 4% based on the Freddie Mac’s forecast, while realtors.com’s Ratiu sees rates hovering around 3.6 for 2022.

So what’s the bottom line for the 2022 housing market?

The tables are clearly turning in favor of the buyer by having more inventory on the market and a more favorable contract environment. Yet they still have to deal with the high or possibly higher prices than 2021. For the finance buyer, they may have more challenges qualifying from mortgages with the interest rates predicted to rise.

I hope you enjoyed this article. Please let me know if you have any questions. Warren


Hello…I work with both buyers and sellers in the Tri-Valley area of Northern California. The Tri-Valley is comprised of 6 cities: Pleasanton, Livermore, Dublin, San Ramon, Danville, and Alamo. To better understand what each city has to offer, I have created a Pros and Cons video and BLOG for each – (Pros & Cons for Pleasanton, Pros & Cons for Livermore, Pros & Cons for Dublin, Pros & Cons for San Ramon, Pros & Cons for Danville and Pros & Cons for Alamo). If you are thinking about purchasing or selling a home, please reach out to me by text, phone, or email. If it is convenient, I can schedule a Zoom chat so we can discuss your home goals. Wishing you all the best on your home journey. Cheers!

Warren Oberholser

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Warren Oberholser

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