A panel of economists and housing experts is evenly split on whether affordability challenges or inventory gains will define this year’s housing market.
Experts were polled as part of the latest Zillow Home Price Expectations Survey (ZHPES):
- 41% of participants said sales will grow
- 41% predict a slowdown
- 18% believe sales will remain roughly the same
Panelists who foresee lower sales in 2022 point to financial strains on buyers as the main driving factors:
- 54% of respondents cite worsening home affordability as the most important reason for a sales decline
- 28% said that higher mortgage rates would precipitate the decline
Among those panelists who anticipate an uptick in sales, additional inventory is overwhelmingly cited as the key:
- 51% said an increase in existing homes listed for sale will be the most important factor
- 21% pointed to more new homes being completed and listed for sale as the key factor
Although every respondent in this latest survey expects nationwide home price appreciation to slow in 2022 from last year’s record-breaking pace, the average of their long-term projections remains among the most bullish outlooks for home values in ZHPES history.
On average, panelists expect home values to grow another 6.6% this year, and by 23.5% over the coming five years.
“The outlook for home sales in 2022 hinges on which side yields first,” said Jeff Tucker, Senior Economist at Zillow. “If buyers finally balk at unaffordable prices, sales volumes could fall. But if homeowners finally start listing their homes en masse, we could see a sales bonanza, cooling the pace of appreciation. Our expert survey panel was split right down the middle on which scenario to expect.”