Source: Scotsman Guide —
Will an influx of new inventory push home sales in 2022, or will falling affordability push buyers to the sidelines and dampen activity? A new Zillow poll has revealed that economists and housing industry observers are split on where the market is headed in the new year.
When asked if home sales will grow or drop this year compared to last year, 41% of participants in Zillow’s Home Price Expectations Survey answered that sales were on the way up — but another 41% replied that a decrease was in the cards. Eighteen percent of respondents replied that they believe sales will be flat year over year.
Zillow’s own forecast, most recently released in December, calls for a 6.5% increase in existing home sales. That forecast was based on recent sales trends coupled with anticipated household formation rates and expectations that rates will still stay relatively low. Bearish experts participating in Zillow’s survey, however, continue to be concerned with the financial pressures hefted onto buyers by still soaring home prices. Fifty-four percent of respondents pointed to worsening affordability as the most important reason for a sales decline, with growing mortgage rates — especially given the Federal Reserve’s suggestion that three rate hikes could be on the table in 2022 — cited by 28%.
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