What are the predictions for the 2022 U.S. housing market? Will home prices drop? Is there a real estate bubble?

The 2022 Housing Market will see Rising Home Prices

We’ve seen huge jumps in real estate prices over the last two years. From December 2020 to December 2021, we saw a jump of 18.5% according to CoreLogic. Several things are contributing to this increase:

  • More demand than supply – there is a housing shortage.
  • Investors getting in while interest rates are low.

The question is – Are we in a real estate bubble? Will house prices drop in California, Nevada, and the rest of the U.S. in 2022?

In an interview with The New York Times, Jenny Schuetz, a housing researcher at the Brookings Institution, says it’s not a bubble. She said what’s happening with home prices is the fundamentals of economics. There are not enough houses and we have a huge number of people wanting homes.

Those things don’t change quickly or easily. It takes time to build homes, there are labor shortages, and lumber costs are high. Meanwhile, the largest generation ever born, Millennials, have been in the workforce for some time now and want to buy homes and start families.

Will the Housing Market Slow Down in 2022

Fox Television asked this question to Lawrence Yun, the chief economist of the National Association of Realtors. Yun said, “We’ve never seen two consecutive years of such high performance, prices rising, double-digit appreciation – so quite the spectacular performance in the housing.”

You would think with growth like that, things might hit a wall. Yun said home prices are expected to keep going up between 4 to 6 percent this year. The double-digit jumps are not expected to happen again this year. So that’s good news for buyers.

That said – some real estate agents are not buying it. They are out in the field, seeing how hungry buyers are. When a home gets dozens of offers within a few days, with many of them way over the asking price, you can see that people what to buy homes and it’s not slowing down.

Lloyd Fox predicts, in the same Fox article that “The demand is just too high for things to cool off.”

Will Mortgage Rates Rise in 2022?

Average mortgage rates have risen over the last 6 months and they are expected to keep going up. Why?

Inflation was 7% in 2021 – the highest we’ve seen since 1981. That’s right – we are experiencing the highest inflation in 40 years in the United States. The Federal Reserve is concerned about runaway inflation so they are increasing rates to help fight it. They want to slow everything down, which tends to happen when it’s more expensive to borrow money.

How does this affect 2022 homebuyers? It means they want to buy sooner rather than later so they can take advantage of rates before they go up. It also affects 2022 mortgage refinances. If you’ve been considering a refinance, now is the time! If you wait, the rates will go up and it will be more difficult to get a favorable refinance offer.


Unfortunately, nobody really knows what the 2022 housing market will do. Experts can weigh in all day, but they have different opinions and estimates. Some say growth will only be 4%, others say it will be much higher. We just don’t know.

What most experts do agree on is two things:

  1. 2022 Home prices will continue to rise.
  2. 2022 Mortgage rates will continue to go up.

If you’ve been on the fence about buying a home or refinancing, let us know how we can help! Send an email to lisa@lisafleckteam.com, or call me at (775) 688-9100. I want to help you get a great, competitive mortgage so you can either buy your dream home this year before prices rise too much or refinance and lower your monthly payments on you current home.