Housing Market Forecast 2022: Will It Crash or Boom in 2022

Mortgage rates at record lows and a lack of available inventory are sustaining the US housing market’s demand. While affordability concerns continue to grow, low mortgage rates, increased savings, and a strengthening job market all contribute to making homeownership more accessible to a wide number of prospective buyers. However, will the housing market ever crash? Let’s look at the most recent trends in 2021 and housing market predictions for 2022.
In 2020, the number of home sales increased significantly and surpassed 2007 levels. Despite the economic uncertainty caused by the pandemic, many buyers took a more serious approach to homeownership than ever before. It resulted in a massive, but brief, increase in homeownership as a result of drastically reduced spending. The housing market has been particularly robust this year, with high demand for homes in almost every area of the nation.
The real estate market has emerged as a boon for sellers and a source of worry for buyers in the middle of this epidemic. Home prices have been increasing in the mid-single digits for many years. Recent double-digit price rises reflect the convergence of exceptional demand and chronically low supply. Prices are increasing as a result of enough money on the sidelines and very low mortgage rates.
The improving economy and the approaching peak homebuying years of millennials are driving a residential housing boom. The housing supply is now at its lowest level since the 1970s, due to millennial homeownership and other factors such as rising building prices and real estate speculators snapping up starter homes.
The Census Bureau has released its most recent quarterly report, which includes data through the third quarter of 2021. Seasonally adjusted, the homeownership rate for Q3 is 65.4 percent, down from 65.4 percent in Q2. Additionally, the nonseasonally adjusted Q2 figure is 65.4 percent, which is unchanged from the Q2 2021 figure.
Low mortgage rates, coupled with more work-from-home possibilities created by the pandemic, have also fuelled a rise in housing demand, especially in lower-density suburbs. Detached single-family houses continue to be in great demand. These properties provide greater living space and separation from adjacent houses than attached properties provide.
We’ll examine current real estate trends, including price and rent increases, housing sales and supply, mortgage rates and delinquencies, and other key industry takeaways and insights into the US housing market.
The Housing Market’s Current Trends: Crash vs Boom?
In November, the housing markets are demonstrating signs of rebalancing, as evidenced by a steady pace of transactions and more moderate price growth. As more homeowners list their homes for sale, these homes remain on the market for longer periods of time. Despite this, buyers must be prepared to act quickly, even if they get a few additional days to decide. While the housing market remains largely a seller’s market due to demand still outpacing supply, it is clear that things are changing. More homes are coming on the market, and the number of bidding wars has decreased significantly.
Forecasting home price appreciation is a challenging task. While inventory has increased slightly, it remains significantly below pre-pandemic levels and is simply unable to meet current demand. The latest housing news has Zillow revising its 2022 real estate forecast. They released a bullish 2022 forecast in September, predicting that home prices in the United States would rise another 11.7 percent over the next 12 months.
However, the real estate listing site now claims that their previous forecast was too pessimistic. They published a new report predicting that home prices in the United States will increase 13.6 percent between October 2021 and October 2022, and to end 2021 up 19.5% from December 2020.
While Zillow’s forecast is bullish, it is also a bit of an outlier when compared to CoreLogic’s forecast for a 2.2 percent increase in US home prices. On the other hand, Freddie Mac’s forecast is more bullish than Zillow’s. The FMHPI is an indicator for typical house price inflation in the United States. It indicates that home prices increased by 11.3 percent in the United States in 2020 as a result of robust housing demand and record low mortgage rates.
Growth is expected to slow to 7 percent in 2022, according to their latest forecast. The pace of home sales has cooled since the first quarter of 2021 when it was at 7.2 million. Freddie Mac predicts home sales to hit 6.8 million for the full years 2021 and 2022. Additionally, they forecast house price growth of 16.9% in 2021. However, they expect house price growth to slow to 7.0% in 2022.
Strong house price growth is expected to lift home purchase mortgage originations from $1.9 trillion in 2021 to $2.1 trillion in 2022. With a higher mortgage rate forecast for 2022, they anticipate refinancing activity to soften, with refinancing originations declining from $2.6 trillion in 2021 to just below $1.0 trillion in 2022. Overall, Freddie Mac predicts that total originations will decline from $4.5 trillion in 2021 to $3.1 trillion in 2022.
Source: Freddie Mac
According to Realtor.com’s October 2021 national housing report, the housing market is settling into a pattern of consistent, high single-digit price growth, rapid inventory turnover, and a steadily shrinking inventory of available homes for sale. We saw consistent improvement in inventory earlier this fall as the rate of decline compared to last year slowed. This progress stalled in October as it became increasingly unlikely that inventory would catch up to last year’s levels, much less more typical 2017 to 2019 levels.
Numerous cities that experienced bidding wars earlier this year are now experiencing a more tranquil housing market, with price reductions bringing sky-high asking prices back down to earth. While the market continues to be active, there are fewer competing offers and contingencies have returned, both of which are clear indicators of a healthier housing market. For buyers, approachable mortgage rates and less competition mean increased chances of finding the perfect home. Nonetheless, buyers of a median-priced home will pay an additional $142 toward their mortgage payment today compared to a year ago.
Home prices are now rising in the single digits, having passed their peak growth rates. These market trends point to a positive development for buyers as we enter the second half of this year. Median listing prices in several metro areas are continuing to fall, owing to an increase in lower-priced houses. New sellers are entering the market at near-normal levels, and while property prices remain high, they may need to consider pricing more competitively in the near future.
The nationwide median listing price for active listings in October 2021 was $380,000, up 8.6 percent from the previous year and up 21.8% compared to 2019. The median national home price for active listings remained the same from September through October. Active listing prices in the nation’s largest metros grew by an average of 5.2% compared to last year, slightly higher than last month’s rate of 4.1%.
While median listing price growth is slowing, this does not represent that the housing market will crash. However, the share of homes with price reductions in September surpassed last year’s level. The share of homes having price reductions increased by 0.8 percentage points catching up to 2016 levels. The share of price reductions, however, remains 4.6 percentage points lower than in 2018 and 2019.
The decline in time-on-market has slowed but homes are still being picked up rapidly as demand remains high. The time a typical listing spends on the market is beginning to correspond to seasonal patterns. The typical home spent 45 days on the market this October, 6 days less than last year, as the housing market slows down into the winter off-season.
Due to scarcity and demand, real estate will still appreciate at a faster-than-average rate through late 2021. According to CoreLogic, a data and analytics company, home prices nationwide, including distressed sales, increased year over year by 18.1% in August 2021 compared with August 2020, marking the largest annual gain in home prices in the 45-year history of the CoreLogic Home Price Index. On a month-over-month basis, home prices increased by 1.3% in August 2021 compared with July 2021.
No state saw a year-over-year decrease in house prices. Idaho (32.2 percent) and Arizona saw the greatest year-over-year increases (29.5 percent). The large cities/metros like Las Vegas, LA, San Diego, Denver, Houston, Chicago, etc continue to experience price increases in August, with Phoenix leading the way at 30.9% year-over-year. The CoreLogic HPI Forecast indicates that home prices will increase on a month-over-month basis by 0.3% from August 2021 to September 2021, and on a year-over-year basis by 2.2% from August 2021 to August 2022.
While the housing market continues to expand and support the post-pandemic economy, these market forces are impacting access for certain buyers unevenly. According to a recent CoreLogic consumer survey, 59% of consumers looking to purchase a home reported combined household earnings of at least six figures, compared to the 10% of consumers looking to purchase earning less than $50,000.
Existing-Home Sales Increased 7% in September From August
According to the National Association of Realtors®, existing-home sales increased in September after a decline the previous month. Each of the four main US areas had month-over-month growth. On a year-over-year basis, one area remained stable, while the other three showed declines in sales.

A little improvement in supply over the preceding months aided in boosting September sales.
Existing-home sales on a seasonally adjusted annual rate rose 7% in September from August.
Total existing-home sales that include single-family homes, townhomes, condominiums, and co-ops, rose 7.0% from August to a seasonally adjusted annual rate of 6.29 million in September.
However, sales decreased 2.3% from a year ago (6.44 million in September 2020).
Home prices increased in all the regions.
The median existing-home sales price climbed 13.3% year-over-year to $352,800.
This marks 115 straight months of year-over-year increases.
First-time buyers made up just 28% of sales, the lowest level since July 2015.
The housing supply was at 1.27 million units in September, down 13% from a year earlier.
At the current rate of sales, this equates to a 2.4-month supply.
The median price is significantly impacted by the kind of homes presently on the market.
The majority of activity occurs at the high end of the market since inventory is most depleted at the low end.
Sales of houses priced between $100,000 and $250,000 decreased by 22.7% year over year.
Sales of homes priced beyond $1 million increased by 30.5% year over year.

The South accounted for over half of all the sales in September, accounting for 44 percent, followed by the Midwest at 23 percent and the West at 21 percent, with the Northeast accounting for only 12 percent. The highest sales were seen in the price segment of $250,000 to $500,000. This price range accounted for 43% of total home sales seen in September. The price segment of $100,000 to $250,000 range accounted for 25% of total home sales.

The current supply of homes on the market remains historically low. With the recovering economy, more buyers are entering the market. And, because there is still a limited supply of housing inventory, home prices continue to rise even in a low-interest-rate scenario. With increased supply, home price growth will gradually moderate, but a broad price decline is unlikely. The housing market will continue to attract buyers as a result of the drop in mortgage rates as well as an increase in new listings.

Existing Housing Sales in September
(Regional Breakdown By N.A.R.)

Northeast
Existing-home sales grew 5.5% in September, posting an annual rate of 770,000, an 8.3% decrease from September 2020.

The median price in the Northeast was $387,200, up 9.2% from one year ago.

Midwest
Existing-home sales rose 5.1% to an annual rate of 1,440,000 in September, a 2.7% drop from a year ago. 

The median price in the Midwest was $265,300, a 9.1% increase from September 2020.

South
Existing-home sales in the South jumped 8.6% in September, recording an annual rate of 2,770,000, unchanged from one year ago. 

The median price in the South was $307,500, a 14.8% rise from one year ago.

West
Existing-home sales in the West climbed 6.5%, registering an annual rate of 1,310,000 in September, down 3.0% from one year ago.

The median price in the West was $506,300, up 8.3% from September 2020.

New Home Sales Surged to a Six-Month High in September
In September, new single-family home sales in the United States increased to a six-month high, but rising house prices are making homeownership less accessible for some first-time purchasers. New home sales increased 14.0 percent last month to a seasonally adjusted annual pace of 800,000 units, the highest level since March, according to estimates released by the U.S. Census Bureau and the Department of Housing and Urban Development.
August’s sales pace was revised downward to 702,000 units from 740,000 units previously reported. The populous South, as well as the West and Northeast, saw an increase in sales. They, on the other hand, fell in the Midwest. Sales decreased 17.6 percent year over year. They had reached 993,000 units per month in January, the highest level since the end of 2006.
In September, the median new home price increased 18.7 percent year over year to $408,800. The continued concentration of sales in the $200,000-$749,000 price bracket. Under-$200,000 sales, the most desirable segment of the market, accounted for only 2% of transactions. Around 74% of homes sold last month were under construction or had not yet been built.
There were 379,000 new homes on the market in September, the same number as in August. Houses under construction accounted for 62.5 percent of the inventory, while unbuilt dwellings accounted for approximately 28 percent. The seasonally‐adjusted estimate of new houses for sale at the end of September was 379,000. This represents a supply of 5.7 months at the current sales rate.
Courtesy of Census.gov
Housing Construction Trends & Homebuilder Confidence
Residential construction had ended in 2020 on a strong note. Housing starts rose 5.8% to 1.67 million annualized units in December. Total starts were 2.8% higher than a year ago.  Privately‐owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 1,728,000. This is 6.0 percent (±1.4 percent) above the revised July rate of 1,630,000 and is 13.5 percent (±1.8 percent) above the August 2020 rate of 1,522,000.
Single‐family authorizations in August were at a rate of 1,054,000; this is 0.6 percent (±1.3 percent) above the revised July figure of 1,048,000. Authorizations of units in buildings with five units or more were at a rate of 632,000 in August. Privately‐owned housing starts in August were at a seasonally adjusted annual rate of 1,615,000.
This is 3.9 percent (±11.3 percent) above the revised July estimate of 1,554,000 and is 17.4 percent (±12.1 percent) above the August 2020 rate of 1,376,000. Single‐family housing starts in August were at a rate of 1,076,000; this is 2.8 percent (±10.4 percent) below the revised July figure of 1,107,000. The August rate for units in buildings with five units or more was 530,000.
The NAHB also gets input from builders on how confident they are in the housing market based on buyer behavior, sales, and incorporates any forecasts as well. Building permits have recovered from epidemic lows, and builders are scrambling to close the supply-demand imbalance. They are still optimistic a year after the Covid epidemic brought home development to a halt. Because the current house market continues to suffer from a record low number of listings, they are seeing high demand from potential purchasers.
It is becoming increasingly difficult for them to meet this housing demand due to supply delivery issues and rising material costs. NAHB Housing Market Index (HMI) is a gauge of builder opinion on the relative level of current and future single-family home sales. It is a diffusion index, which means that a reading above 50 indicates a favorable outlook on home sales; below 50 indicates a negative outlook.
Builder confidence increased somewhat in September as a result of reduced lumber costs and robust home demand, although the housing sector continues to struggle with supply chain problems and labor shortages in the construction industry. According to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), builder confidence in the market for newly constructed single-family homes increased one point to 76 in September, reversing a three-month drop.
NAHB expects housing affordability will be a key demand-side challenge in the coming quarters, given the rapid rate of growth for home prices and construction costs over the last year. The HMI index gauging current sales conditions rose one point to 82, the component measuring traffic of prospective buyers posted a two-point gain to 61 and the gauge charting sales expectations in the next six months held steady at 81. Looking at the three-month moving averages for regional HMI scores, the Northeast fell two points to 72, the South dropped two points to 80 and the West registered a two-point decline to 83. The Midwest remained unchanged at 68.
In 2021, the Mortgage Bankers Association (MBA) forecasts single-family housing starts to be around 1.134 million. And that could just be the beginning, as projections going forward are even rosier: 1.165 million single-family homes in 2022 and 1.210 million in 2023. New home builders will ramp up production to help relieve the shortage of inventory of homes for sale throughout the United States. The added inventory would no doubt aid buyers in their search to secure their dream home, while also helping to ease price increases throughout the country.
According to Urban Land Institute, real estate market conditions and values in the U.S. are expected to rebound in 2021 and trend even higher in 2022, with single-family homes outperforming other sectors such as commercial, retail, hotel, and rental. Home prices will grow an average of 4.1% over the next three years, above the long-term average of 3.9%, according to the report, based on a survey of 43 economists at 37 leading real estate organizations.
Is Something Big Is About to Happen in the Housing Market?
Mortgage rates have been falling since November 2018, when they peaked at 4.94 percent, a five-year high. The rates were cut in 2020 as a result of the pandemic, which helped to mitigate the impact of increasing prices. In January 2021 it reached a record low of 2.65%, driven by massive monetary incentives and investors’ economic recovery concerns. Rates rebound from their lowest point in the first week of April to 3.18%. The Federal Reserve’s continued monetary easing, and especially the bank’s monthly purchases of mortgage-backed securities, is keeping a strong downward pressure on rates.
In 2021, mortgage rates are expected to average 3.1 percent, according to the National Association of Realtors, and 3.3 percent according to the Mortgage Bankers Association. These rate estimates are both up from the 3.0% mortgage rate average in 2020 but lower than 2019 average rates. The amount of time required to save an adequate down payment has increased in recent years, and putting together a down payment remains the most difficult hurdle most buyers will face on their way to homeownership.
Low rates give borrowers more buying power and a significant decline in mortgage rates can help push up home prices as witnessed in recent months. If mortgage rates continue to rise in 2021, affordability is likely to become a bigger challenge this year. The combination of intense demand and the low mortgage rates has pushed home prices to levels that are making it difficult to save for a down payment, particularly among first-time buyers.
According to Bankrate’s latest survey of the nation’s largest mortgage lenders, as of November 12th, 2021, the average rate for a 30-year fixed mortgage is 3.07 percent, a decrease of 10 basis points since the same time last week. A month ago, the average rate on a 30-year fixed mortgage was higher, at 3.20 percent. The average rate for the benchmark 15-year fixed mortgage is 2.40 percent, down 8 basis points from a week ago.

At the current average rate, you’ll pay $421.60 per month in principal and interest for every $100,000 you borrow.
That’s lower by $6.50 than it would have been last week.
Monthly payments on a 15-year fixed mortgage at that rate will cost roughly $390 per $100k borrowed.

Note: The larger payment may be more difficult to fit into your monthly budget than a 30-year mortgage payment, but it comes with some significant benefits: you’ll save thousands of dollars in total interest paid over the life of the loan and build equity much faster.
How Mortgage Rates Have Shifted Over The Past Week

30-year fixed mortgage rate: 3.07%, down from 3.17% last week, -0.10
15-year fixed mortgage rate: 2.40%, down from 2.48% last week, -0.08
5/1 ARM mortgage rate: 2.74%, down from 2.76% last week, -0.02
Jumbo mortgage rate: 3.05%, down from 3.16% last week, -0.11

The Federal Reserve’s actions last year to keep mortgage rates low have been maintained. However, when contrasted to the robust increase in home prices, the low mortgage rates are insignificant. Here’s an example to show how soaring home prices and plunging mortgage rates can have offsetting effects. Low mortgage rates help but don’t eliminate the risk of affordability crunch that the housing market could still face if home prices continue to rise at a rapid pace.
Buying a home in a seller’s market can feel like you’re losing money. You may just wait a few months or even a year so that prices will flatten (or come down). The problem is that prices could keep rising to the point where you’re priced out of the market. There’s no guarantee either way. You can opt to refinance at today’s rates to at least cut your monthly mortgage payments. The present scenario makes it appealing to buyers who have been spending all this money on rent. Demand is robust throughout the country, but homebuyers continue to be held back by the lack of homes for sale and rapidly increasing home prices.
Housing Market Monthly Trends: Prices Continue to Rising in October
Before the pandemic, the housing market was remarkably strong. The coronavirus crisis response was unprecedented. The federal government ordered a de facto shutdown of the entire private economy, closing an estimated eighty percent of businesses. It has caused unemployment to soar to at least ten percent, while tens of millions are idled. We are now in a period where we can compare housing trends against the early days of the pandemic when the real estate market was largely halted.
Back in March of last year, the real estate market looked to be headed into a steep decline due to widespread stay-home orders. Since then, homebuyers, supported by low-interest rates, have kept the US housing market afloat. The pandemic has certainly affected every sector but the residential real estate market has been very resilient and it continues to be a pillar of support for the economy. The housing market bounced back in 2020 much faster than other sectors of the economy and has sustained that growth and pace into 2021.
2020 was a record-breaking year for the US housing market. The typical U.S. home was worth $266,104 in December, up 8.4% (or $20,587) from a year ago. A total of 5.64 million homes were sold in 2020, up 5.6% from 2019 and the most since before the Great Recession, according to Lawrence Yun, NAR’s chief economist. Sales also rose 0.7% from November and 22.2% year over year. Existing home sales reached the highest level in 13 years.
While we still face economic and health challenges ahead, it is no doubt that the nation will continue to recover from this pandemic and an improving economy will continue to prop up the housing market competition. Industry experts believe the housing market will remain strong and is set to break more records in 2021.
This time the housing market is largely being driven by two factors: a shortage of available housing inventory and extremely low-interest rates. Double-digit annual growth in both list and sale prices shows an extreme lack of inventory and incredible demand — A sign of a seller’s real estate market.
The housing market is still hot, but we may be starting to see rising home prices hurting affordability unless the mortgage rates continue to decline in 2021. Additionally, even if mortgage rates help blunt the effects of higher home prices on monthly payments, they don’t offset the need for larger down payments and other closing costs as home prices rise.
Mortgage applications increased 0.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 8, 2021.

Mortgage rates reached their highest level since June 2021, but application activity changed little this week.
The Market Composite Index, a measure of mortgage loan application volume, increased 0.2 percent on a seasonally adjusted basis from one week earlier.
The Refinance Index decreased 1 percent from the previous week and was 16 percent lower than the same week one year ago.
The refinance share of mortgage activity decreased to 63.9 percent of total applications from 64.5 percent the previous week.
The FHA share of total applications decreased to 10.2 percent from 10.5 percent the week prior.
The VA share of total applications decreased to 10.2 percent from 10.3 percent the week prior.
The USDA share of total applications decreased to 0.4 percent from 0.5 percent the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) increased to 3.18 percent from 3.14 percent.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.20 percent from 3.12 percent.
The average contract interest rate for 15-year fixed-rate mortgages increased to 2.48 percent from 2.45 percent.

According to Zillow, the current typical value of homes in the United States is $308,220. This value is seasonally adjusted and only includes the middle price tier of homes. In September 2020, the typical value of homes was $260,000. Home values have gone up 18.4% over the past year and Zillow predicts they will rise 13.6% over the next twelve months.
Source: Zillow.com
Realtor.com’s October 2021 real estate data demonstrates that the housing market is settling into a pattern of steady, high single-digit price growth, rapid inventory turnover, and a steadily shrinking inventory of available homes for sale.
While nearly three-quarters of consumers believe now is a good time to sell, according to Fannie Mae’s National Housing Survey, this sentiment has yet to translate into increased selling activity. Due to the fact that many sellers are also homebuyer hopefuls, the scarcity of available homes for sale makes the decision to list a home even more difficult. It can be difficult for the housing market to break free of this stalemate, and we anticipate increased construction to help supply keep pace with demand in the coming year.

In October, the nationwide median listing price for active listings was $380,000, an increase of 8.6 percent year over year and 21.8 percent year over year.
In large metros, median listing prices grew by 5.2% compared to last year, on average.
Nationally, the inventory of active listings decreased by 21.9% year over year, while the overall inventory of unsold houses, including pending listings, decreased by 14.8%.
The inventory of active listings is down 51.9% compared to 2019.
Newly listed homes are down 2.3% nationally compared to a year ago, and down 4.8% for large metros over the past year.
Sellers are still listing at rates 11.6% lower than typical 2017 to 2019 levels.
Nationally, the typical home spent 45 days on the market in September, down 8 days from the same time last year and down 21 days from 2019.

REGIONAL HOUSING MARKET STATISTICS – OCTOBER 2021

Region
Active Listing Trends YoY
New Listing Trends YoY
Median Listing Price YoY
Median Days on Market Trends YoY

Midwest
-10.5%
-2.5%
-3.9%
-3 days

Northeast
-17.9%
-8.5%
1.0%
-3 days

South
-25.8%
-2.7%
9.4%
-10 days

West
-22.7%
-8.0%
9.7%
-5 days

Housing Market Trends For Supply
Nationally, the inventory of homes for sale in October decreased by 21.9% over the past year, a similar rate of decline compared to the 22.2% drop in September. This decline amounted to 179,000 fewer homes actively for sale on a typical day in October compared to the previous year. A slowing in the decline of inventory indicates that the market is improving, but active inventory remains historically low. The total number of unsold homes nationwide–a metric that includes active listings and listings in various stages of the selling process that are not yet sold– is down 14.8% percent from October 2020.
In October, newly listed homes declined by 2.3% on a year-over-year basis following typical seasonal patterns. However, sellers are still listing at rates 11.6% lower than typical of 2017 to 2019 levels. Last month saw a shift in direction, with fewer new sellers listing homes than the previous year, and this trend continued this month.
If the trend continues into November, consumers may see fewer fresh listings during what is typically the best time of year to buy a home. New properties are coming on the market every week but are also being sold quickly. The total housing supply is not enough to mark it as a buyer’s real estate market and it is not equal to what is needed to relieve the historically tight home supply.

Housing inventory in the 50 largest U.S. metros overall decreased by 20.5% over last year in October, an increase in the rate of decline compared to last month’s 18.5% decrease. Regionally, the inventory of homes in southern metros is still showing the largest year-over-year decline (-25.8%) followed by the West (-22.7%), Northeast (-17.9%), and Midwest (-10.5%). The South’s greater inventory shortage may take longer to recover from than in other areas.
Housing Markets that saw the largest year-over-year increase in newly listed homes in October:

Austin, where newly listed homes grew by +15.3%
Memphis, where newly listed homes grew by +14.8%
Buffalo, where newly listed home grew by +10.7%

The only housing Markets that saw the year-over-year decrease in newly listed homes in October:

Hartford, where newly listed homes declined by -30.2%
San Diego, where newly listed homes declined by -21.8%
Boston, where newly listed homes declined by -19%

According to the National Association of Realtors®, the total housing inventory at the end of September amounted to 1.27 million units, down 0.8% from August and down 13.0% from one year ago (1.46 million). Unsold inventory sits at a 2.4-month supply at the present sales pace, down 7.7% from August and down from 2.7 months in September 2020.

Housing Market Trends For Median Listing Prices
Realtor.com’s data shows that the median national home listing price remained the same from September through October, at $380,000. The median listing price again grew by 8.6% over last year, the same growth rate as last month. As previously stated, while median listing price increase has slowed to single digits, this trend reflects a shift in the inventory mix available for sale this year, with more small homes available for sale this year. The median listing price of a typical 2,000 square-foot single-family house is up 16.7 percent year over year.

 

Housing Price Trends: National Listing Price Growth in 2021

In January 2021, the median national home listing price grew by 15.4 percent year-over-year to $346,000.

In February 2021, the median national home listing price grew by 13.7 percent year-over-year to $353,000.

In March 2021, the median national home listing price grew by 15.6 percent year-over-year to $370,000.

In April 2021, the median national home listing price grew by 17.2 percent year-over-year to $375,000.

In May 2021, the median national home listing price grew by 15.2 percent year-over-year to $380,000.

In June 2021, the median national home listing price grew by 12.7 percent year-over-year to $385,000.

In July 2021, the median national home listing price grew by 10.3 percent year-over-year to $385,000.

In August 2021, the median national home listing price grew by 8.6 percent year-over-year to $380,000.

In September 2021, the median national home listing price grew by 8.6 percent year-over-year to $380,000.

In October 2021, the median national home listing price grew by 8.6 percent year-over-year to $380,000.

Asking prices in the nation’s largest metro housing markets grew by an average of 5.2% compared to last year, slightly higher than last month’s rate of 4.1%. Price growth in the nation’s largest metros is slowing slightly faster than in other areas, but the primary reason is new inventory bringing relatively smaller homes to the market.
Housing Markets that saw the largest year-over-year increase in listing prices in October:

Austin, where median listing price grew by +32.5%
Las Vegas, where median listing price grew by +27.2%
Tampa, where median listing price grew by +21.8%

Housing Markets that saw the greatest increase in their share of price reductions compared to last year:

Milwaukee (+5.8 percentage points)
Hartford (+5.3%)
Austin (+5.0 percentage points)

Housing Market Trends For Median Sales Prices
According to the National Association of Realtors®, the median existing-home price for all housing types in September was $352,800, up 13.3% from September 2020 ($311,500), as prices rose in each region. This marks 115 straight months of year-over-year increases. The median existing single-family home price was $359,700 in September, up 13.8% from September 2020. The median existing condo price was $297,900 in September, an annual increase of 9.3%.

Housing Sales Trends 2021
Homes for sale in August continued to sell more quickly than last year, as buyer demand remained on a strong footing. The average home stayed on the market for 45 days in October, down 8 days from last year. While homes continue to be snapped up quickly as demand remains high, the average time a listing spends on the market is beginning to conform to seasonal norms.
In the 50 largest U.S. metros, the typical home spent 39 days on the market, and homes spent 6 days less on the market, on average, compared to last October. Among these 50 largest metros, the time a typical property spends on the market has decreased most in large metros in the South (-10 days), followed by the West (-5 days), and Midwest and Northeast (-3 days).
Homes saw the greatest decline in time spent on the market compared to last year in:

Miami (-31 days)
Raleigh (-30 days)
Jacksonville & Orlando (-17 days)

Four metros saw time on the market increase: New Orleans (+11 days), New York (+5 days), Cincinnati (+3 days), and Philadelphia (+1 day).
Total existing-home sales that include single-family homes, townhomes, condominiums, and co-ops, rose 7.0% from August to a seasonally adjusted annual rate of 6.29 million in September. However, sales decreased 2.3% from a year ago (6.44 million in September 2020), according to the National Association of Realtors®. However, sales decreased 2.3% from a year ago (6.44 million in September 2020).
Distressed sales – foreclosures and short sales – represented less than 1% of sales in September, equal to the percentage seen a month prior and equal to September 2020. First-time buyers accounted for 28% of sales in September, down from 29% in August and 31% in September 2020. Individual investors or second-home buyers, who account for many cash sales, purchased 13% of homes in September, down from 15% in August but up from 12% in September 2020.
All-cash sales accounted for 23% of transactions in September, up from both 22% in August and from 18% in September 2020. Single-family home sales decreased to a seasonally adjusted annual rate of 5.59 million in September, up 7.7% from 5.19 million in August and down 3.1% from one year ago. Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 700,000 units in September, up 1.4% from 690,000 in August and up 4.5% from one year ago.

Hottest Housing Markets: Sales And Price Growth Forecast 2021
Realtor.com’s top 10 housing markets for 2021 have substantial momentum from 2020 which they will carry into 2021. The tech hubs and state capitals will lead the pack for home price appreciation and sales growth. These metros are in a prime position to see an uptick in home sales and rising prices. Low mortgage rates throughout most of the year help these markets see price and sales growth on top of 2020’s high levels. Economic momentum from the thriving tech industry, coupled with healthier levels of supply, will position these markets for growth in 2021.
Home prices across these top 10 markets are forecasted to increase by 6.9 percent and sales by 13.1 percent year-over-year. Sacramento ranks number one for 2021 with a median home price of $554,000. Sacramento home prices are predicted to increase by 7.4 percent while sales will increase by 17.2 percent. San Jose ranks at #2 where the median home price is expected to rise 10.8 percent in 2021. Harrisburg, Pennsylvania came in at No. 7 on the list. Its relative affordability will boost the sales by 14% in 2021 while the median will grow at a modest rate of 3.8%.
Source: Realtor.com’s top 10 housing markets for 2021
Is the Housing Market Going to Crash in 2021 or 2022?

Is there going to be a housing market crash in 2021 or 2022? What a difference a pandemic like Covid makes on the housing market, which advances in the opposite direction of what one would expect in a recession! We are unlikely to see a housing market crash similar to the one that occurred during the 2008 housing bubble. We do see the momentum cooling over the next year. The economic factors resulting in that housing crash were much different than today. Here’s an overview of how to think about a potential housing market crash and the factors that affect real estate cycles.
Early on in the COVID-19 crisis, it appeared that the housing market might collapse. Instead, a housing boom has occurred with the median home prices rising by an astounding 24 percent since the crisis began. The mortgages backed by the federal government were exempted from the foreclosure moratorium. It kept the housing market afloat during the crisis. To help borrowers at risk of losing their homes due to the coronavirus national emergency, FHFA announced that Fannie Mae and Freddie Mac (the Enterprises) are extending the moratoriums on single-family foreclosures and real estate owned (REO) evictions until June 30, 2021.
On June 24th, the Biden administration extended the foreclosure moratorium for a final, additional month until July 31, 2021, and the forbearance enrollment window through September 30, 2021, and provided up to three months of additional forbearance for certain borrowers. It will avert the displacement of foreclosed borrowers and other occupants who need more time to access suitable housing options after foreclosure. The government’s moratoria have been effectively stopped foreclosure activity on everything but vacant and abandoned properties.
2020 ended the year with a near-record number of seriously delinquent loans, but historically low levels of foreclosure activity. There is a possibility of a backlog of foreclosures building up due to this moratorium and no one knows how big that backlog is going to be. The foreclosure backlog comprises three types of loans — loans that were in foreclosure before the government’s moratoria; loans that would have defaulted under normal circumstances; and loans that would default due to job losses induced by the pandemic.
These actions were taken by three federal agencies that back mortgages – the Department of Housing and Urban Development (HUD), Department of Veterans Affairs (VA), and Department of Agriculture (USDA). The Federal Housing Finance Agency (FHFA) provided similar relief for mortgages backed by Fannie Mae and Freddie Mac. It has given relief to more than 28 million homeowners with an Enterprise-backed mortgage.
The foreclosure moratorium applied to Enterprise-backed, single-family mortgages only. The REO eviction moratorium applied to properties that have been acquired by an Enterprise through foreclosure or deed-in-lieu of foreclosure transactions. These actions have prevented foreclosures and allowed some homeowners with government-backed loans to pause their mortgage payments for up to eighteen months.
The foreclosure crisis that followed the 2008 housing crash was exacerbated in part by the fact that tens of millions of financially stressed homeowners were underwater. This year, that is unlikely to be the case for heavily indebted homeowners. These homeowners are likely to have significant home equity, and if they are unable to repay their mortgage, they can simply sell into the current hot housing market. The buyer traffic is still moderately strong throughout most of the country, which is a great sign for these homeowners.
So, is this a Housing Bubble? A “housing bubble” is formed by the artificially and unsustainably high prices of an already hot housing market — like the one United States has been experiencing over months. The housing industry and its economic factors depend on supply and demand. The bubble starts forming when demand for property rises and supply begins to diminish, a combination that can only lead to price hikes. As inventories shrink, anxious buyers start paying even more money on properties that are already selling much beyond the market value.
Now the fear is that even if only a small percentage of the 1.75 million homeowners currently protected by the mortgage forbearance program choose to sell rather than repay their mortgage, it could have a significant impact on the historically tight housing market. There will be an increase in housing inventory which has a direct impact on the prices. However, because current inventory is at a 40-year low, we anticipate that home prices will continue to rise rapidly even if the forbearance program is terminated. Let’s see what the comprehensive foreclosure data of the US housing market looks like.
With moratoria lifted, foreclosures begin to increase, but remain 80% below pre-pandemic levels; the delinquency rate falls to 4% for the first time since early 2020, according to Black Knight’s First Look at August 2021 Mortgage Data.

The national delinquency rate on first-lien mortgages fell to 4.00% in August, the lowest it’s been since pandemic-related impacts caused mortgage delinquencies to spike in early 2020.
Serious delinquencies – including those in active forbearance – fell by 108,000 from July and, though down by more than 1 million from last August, are still roughly 930,000 above pre-pandemic levels.
August’s 7,100 foreclosure starts represented the largest such volume in eight months after foreclosure moratoria on federally backed loans were lifted at the end of July.
Despite the increase – which was driven primarily by restarting the process on loans that had been in foreclosure before the moratoria – start volumes remain 80% below August 2019 levels.

US Housing Foreclosure Statistics 2021
ATTOM Data Solutions, licensor of the nation’s most comprehensive foreclosure data released its Q3 2021 U.S. Foreclosure Market Report. The United States’ foreclosure activity increases significantly as the foreclosure moratorium is lifted. It shows that which shows there were a total of 45,517 U.S. properties with foreclosure filings — default notices, scheduled auctions, or bank repossessions — up 34 percent from the previous quarter and 68 percent from a year ago. Q3 foreclosure activity was 60 percent lower than the same quarter that year. Nationwide one in every 3,019 properties had a foreclosure filing in Q3 2021.
Lenders began foreclosure proceedings on 25,209 homes in the United States in Q3 2021, up 32% from the previous quarter and 67% from a year earlier – the first quarterly rise in double digits since 2014. Lenders repossessed 7,574 U.S. properties through foreclosure (REO) in Q3 2021, up 22 percent from the previous quarter and up 46 percent from a year ago the first quarterly increase since Q1 2016. Properties foreclosed in Q3 2021 had been in the foreclosure process an average of 924 days, up slightly from 922 days in the previous quarter but up 11 percent from 830 days in Q3 2020.
The following states had the highest number of foreclosure starts in Q3 2021:

California (3,434 foreclosure starts)
Texas (2,827 foreclosure starts)
Florida (2,546 foreclosure starts)
New York (1,363 foreclosure starts)
Illinois (1,362 foreclosure starts)

The following metropolitan statistical areas had the highest number of foreclosure starts in Q3 2021:

New York, New York (1,456 foreclosure starts)
Chicago, Illinois (1,122 foreclosure starts)
Los Angeles, California (1,102 foreclosure starts)
Miami, Florida (992 foreclosure starts)
Houston, Texas (866 foreclosure starts)

States with the highest foreclosure rates in Q3 2021 were:

Nevada (one in every 1,463 housing units with a foreclosure filing)
Illinois (one in every 1,465)
Delaware (one in every 1,515)
New Jersey (one in every 1,667)
Florida (one in every 1,743)

States that posted the largest number of completed foreclosures in Q3 2021:

Illinois (965 REOs)
Florida (564 REOs)
Pennsylvania (480 REOs)
Michigan (401 REOs)
New York (370 REOs)

Monthly Foreclosure Trends: The report also shows there were a total of 19,609 U.S. properties with foreclosure filings in September 2021, up 24 percent from the previous month and up 102 percent from September 2020. September foreclosure actions were almost 70 percent lower than they were before the COVID-19 pandemic in September of 2019. Nationwide in September 2021, one in every 7,008 properties had a foreclosure filing. Lenders completed the foreclosure process on 2,682 U.S. properties in September 2021, up 8 percent from the previous month and up 33 percent from a year ago.
In 2021, home prices are rising at the highest rate in history, outpacing even the housing bubble preceding the Great Recession. This is, however, most likely not a bubble. Today’s housing market is not at all like the mid-2000s bubble that ruined the US economy. Unlike back then, there is now a severe housing scarcity, and housebuilders are treading carefully when it comes to adding new supplies. The current supply scenario is the polar opposite of the building glut of 15 years ago: there was a major overbuilding problem back then.
Around 2 million houses were created every year at its height, compared to around 1.6 million presently. Also, during the last boom, home demand was artificially boosted by the fact that some people with little or no income could obtain loans. This time, lenders are acting much more responsibly. There is little leverage, and mortgage underwriting is considerably better than it was during the Great Recession. More existing homes were sold last year than in any year since 2006. The latest existing-home sales data shows the tightest housing market on record.
The demand has not gotten significantly stronger since May/June of 2020, and buyers and sellers are continuing to connect at a record pace. This trend shows that the housing market is as strong as it was during the housing bubble of the mid-2000s. It is nowhere too close to a level where you can imagine the balance of real estate market conditions. Speedy home sales continue in all regions of the country and the median sales price continues to have double-digit growth.
Although millions were laid off or furloughed it didn’t prevent house hunters from buying homes across the nation. As a result, the housing market saw the highest pace of sales growth since the height of the unprecedented housing boom in 2005. That expansion was driven by negligent lending in the subprime mortgage market and the current housing boom is driven by the intense demand and record-low mortgage rates. As prices keep climbing month-over-month, it just shows the resilience of the US housing market in the face of an ongoing economic recession.
Although sellers are listing more & more homes we need more new home supply to add to inventory and slow these sharp price increases. When Many market watchers are curious to know how long will this housing boom last or will the market eventually crash? Well, so far, the housing market continues to be sizzling hot resulting in higher home prices and quick-selling homes. The only factor of concern is the housing supply which continues to fall short of demand.
Increasing the supply of homes for sale would certainly help bring balance to this strong seller’s market, but the most recent housing market trends don’t suggest that inventory is likely to improve soon. The US housing market is far from crashing in 2021 or 2022. It continues to play an important supportive role in the country’s economic recovery. Current economic conditions resemble a “swoosh” pattern, with the initial impact from the lockdown followed by a gradual recovery as the economy reopens.
Mortgage rates and slow but steady improvements to the job landscape continue to propel confidence for first-time buyers. The pace of existing-home sales has jumped to a level not seen since 2006 and, importantly, was followed by strong pending sales, purchase mortgage applications, and construction data. The U.S. economy is expected to grow 6.8 percent in 2021, up from a prior 6.6 percent, on a fourth quarter-over-fourth quarter basis, according to the latest forecast from Fannie Mae’s Economic and Strategic Research (ESR) Group.
Their 2022 forecast remains unchanged at 3.0 percent. Economic growth rebounded sharply in March following a weather-related pullback in February. Growth has been supported by waning COVID-19-related restrictions as the vaccination effort progresses, as well as a bolstering of household incomes from the latest stimulus bill. Uncertainty remains over the speed and duration of the current leg of the recovery, but we continue to anticipate a brisk acceleration in the near term, with growth in the second quarter expected at 9.1 percent annualized.
As Federal Reserve has made clear that it has no intention of raising interest rates soon, many households are seizing the opportunity to refinance their existing mortgages. However, additional uncertainty surrounds the timing and implications of the end of the forbearance policies, which provide a temporary pause in mortgage payments to provide relief for those who might be struggling financially for whatever reason. The question that everyone in the industry is asking right now is that how those might impact the number and nature of home sales.
What are foreclosures going to look like once the foreclosure moratoria and forbearance programs come to end? A primary difference this time is that homeowner equity is at an all-time high: over $6.5 trillion. According to RealtyTrac’s parent company ATTOM Data, about 70% of homeowners have more than 20% equity. According to Fannie Mae, the continued improvement in the labor market and higher levels of home equity will likely help limit distressed sales in 2021. So, this record level of homeowner equity means that as foreclosure moratoria eventually expire, the overwhelming majority of distressed assets are likely to be sold well before the foreclosure auction.
The Federal Reserve Bank of New York’s Center for Microeconomic Data released the September 2021 Survey of Consumer Expectations, which reveals that both short- and medium-term inflation forecasts have reached their highest levels since the survey’s launch in 2013. In September, however, year-ahead house price and commodity price forecasts all declined. Labor market expectations increased somewhat, but household finance expectations remained mostly constant (e.g., income or spending growth).
Inflation
Median inflation expectations increased by 0.1 percentage point in September to 5.3%, the eleventh consecutive monthly increase and a new series high since the inception of the survey in 2013. Median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—was unchanged at the short-term horizon and decreased at the medium-term horizon.
Both measures are still well above the levels observed before the outbreak of COVID-19. In September, median year-ahead house price change estimates fell by 0.4 percentage points to 5.5 percent, marking the fourth consecutive monthly decline. The decline was mostly caused by respondents who reside in the Census areas “West” and “Northeast.”
Labor Market

Median one-year ahead expected earnings growth rebounded in September, increasing 0.4 percentage points to 2.9%, substantially above its 12-month trailing average of 2.2%.
Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—increased 0.8 percentage points to 35.8%, slightly above its 12-month trailing average of 35.7%.
The mean perceived probability of finding a job (if one’s current job was lost) rose to 55.2% from 54.9% in August.
Despite the increase, the September reading remains below its pre-pandemic levels.

What Happens Next?
Housing activity is expected to remain strong in 2021, but the growth will likely decelerate from the torrid pace set in the second half of 2021. While the ESR Group expects home sales to rise 6.2 percent in 2021, the monthly pace is likely to slow through much of the year. Low-interest rates are also an inducement to buy homes, but slow supply growth continues to result in high levels of home price appreciation, which is offsetting some of the affordability benefits of the lower rate environment.
Consistent with strong demand and limited supply, home price appreciation is predicted to be 8.0 percent in 2021 (previously 4.2 percent). Zillow’s forecast predicts annual home value growth will rise as high as 13.5% by mid-2021, and for home values to end 2021 up 10.5% from their current levels. For now, there are no indications that price growth is going to slow.
According to Zillow’s market pulse report, while the housing market remains very competitive, slower house value growth suggests that the frenzy that began earlier this year has subsided. This story is reinforced by an increase in for-sale inventory, which seems to be boosting home consumer confidence. While interest rates remain low, they trended sharply up near the week’s conclusion in anticipation of a Federal Reserve decision.

The national Zillow Home Value Index (ZHVI) increased by 17.7% in August from a year ago.
Monthly ZHVI appreciation cooled 0.22 percentage points from July to 1.75%.
More than 1.1 million homes were for sale in August, up 4.1% from July.
Applications for home purchase mortgages increased by 7.6% last week from the week before, according to the Mortgage Bankers Association.
Mortgage rates now sit at their highest level in about two months.
Investors believe that the Federal Reserve could announce plans next week to tighten monetary policy.

Other recent market trends show that more sellers than normal are planning to list their homes for sale. With this trend, homebuyers will certainly have more options to choose from especially in this challenging housing market. The Federal Reserve is playing a key role to support the economy and housing market by keeping borrowing costs low for shorter-term loans. It has a huge impact on all kinds of interest rates, including mortgage rates, through its control of short-term interest rates. Fed is also helping to keep mortgage rates low by purchasing sizable amounts ($40 billion worth every month) of agency mortgage-backed securities (MBS). The Fed has also indicated it plans to keep rates low at least until 2022.
Only 28 percent of respondents to “Fannie Mae’s September 2021 National Housing Survey” said it was a good time to buy a home. 66 percent of respondents said it’s a bad time to buy a home, up from 63 percent last month. As a result, the net share of those who say it is a good time to buy decreased 7 percentage points month over month.
Seller sentiment increases as 74 percent of respondents said they believed it was a good time to sell a home, up from 73 percent last month, while the percentage who say it’s a bad time to sell remained unchanged at 19%. As a result, the net share of those who say it is a good time to sell increased 1 percentage point month over month.
The percentage of respondents who say home prices will go up in the next 12 months decreased from 40% to 37%, while the percentage who say home prices will go down remained unchanged at 24%. The share who think home prices will stay the same increased from 31% to 33%. As a result, the net share of Americans who say home prices will go up decreased 3 percentage points month over month.
The percentage of respondents who say mortgage rates will go down in the next 12 months increased from 6% to 8%, while the percentage who expect mortgage rates to go up decreased from 53% to 51%. The share who think mortgage rates will stay the same decreased from 35% to 33%. As a result, the net share of Americans who say mortgage rates will go down over the next 12 months increased 4 percentage points month over month.
Screenshot Courtesy of Fannie Mae Sep 2021 Data Release
The lack of adequate supply and rise in mortgage rates will likely continue to hold back potential home sales. That’s one reason why Fannie Mae has decreased their housing sales forecast for 2021. But it doesn’t mean that the housing market will crash. They just expect a slowdown in the monthly pace of both existing and new sales later in the year. However, on an annual basis, the total home sales in 2021 are still predicted to be 6.2 percent higher than last year. Even as mortgage rates drift upward, home purchase demand remains robust.
Mortgage rates are expected to remain near borrower-friendly levels and will help maintain strong housing demand in 2021. Hence, the supply-demand dynamics will continue to push home prices up by 8 percent in 2021 – up from the previously predicted rate of 4.2 percent (FHFA Home Price Index). Another interesting thing is that this higher home price forecast more than diminishes the modestly higher interest rate forecast. Therefore, the mortgage originations are also expected to tick up by 14.5 percent year-over-year in 2021.
Fannie Mae predicts overall single-family mortgage market originations in 2021 and 2022 to total $4.0 trillion and $3.0 trillion, up from $3.9 trillion and $2.9 trillion, respectively. However, according to another mortgage giant, Freddie Mac, the total originations will decline to $3.5 trillion in 2021 as higher mortgage rates have the potential to soften the robust demand the housing market has been experiencing.
Freddie Mac predicts home prices will rise by 6.6 percent in 2021, slowing to 4.4 percent in 2022, while it expects home sales to reach 7.1 million in 2021, and then decline to 6.7 million homes in 2022. Even with rising mortgage rates and higher prices, the housing market should remain strong due to very tight inventories and increasing demand as more millennials are projected to buy houses this year.
Now millennials make up the largest share of homebuyers in the US, according to a 2020 survey from the NAR. According to a new study by Realtor.com, buying is more cost-efficient than renting in a growing number of the largest cities in the country. This is encouraging news for the millions of millennials who are approaching peak homebuying age.
The U.S. housing market is 3.8 million single-family homes short of what is needed to meet the country’s housing demand, up 52% as compared with 2018’s shortfall, according to a new analysis from mortgage-finance company Freddie Mac. In 2018, Freddie Mac had estimated that the housing market was 2.5 million units short of what it needed to meet long-term demand. The new estimate is as of the end of 2020 and it emphasizes the severity of the housing supply.
While the current housing shortage is also due to the moratorium on foreclosures but it’s mainly because of home builders not keeping up with long-term demand growth. Single-family housing starts rose last year to 991,000 units but builders would need to construct between 1.1 million and 1.2 million single-family homes a year to meet long-term demand. The last time single-family housing starts broke 1 million was in 2007. Hence, there’s no doubt that with the continued supply-demand imbalance, this upward pull on prices is expected to remain consistent in 2021 and beyond.
In the second half of this year, we will see higher mortgage rates and, as they continue ticking up, which may begin to create a ceiling on the median home price growth, as monthly payments on new mortgages become less and less affordable. Homebuilding will continue and new homes will pile up a bit which will slow down the rate of price appreciation. There are reasons to believe that the housing market will remain tight in 2021 because there are first-time buyers (Millennials) coming into the market.
First-time buyers accounted for 31% of sales in June 2021, also even with May but down from 35% in June 2020. About 4.8 million millennials are turning 30 this year and will continue to do so for the next three years, a significant positive force for the economy and housing. The main challenge for markets is meeting this upsurge in demand with a declining supply. A recent Zillow survey shows that millions will enter the housing market in 2021 to purchase their dream house.
In their survey, more than 1 in 10 Americans (10%) said they moved in the past 12 months, either by choice or circumstance. And now, with the COVID-19 vaccine circulating and the economy slowly picking up steam, Zillow researchers say millions of more households could be potential homebuyers in 2021.
We have seen a huge influx of movers wanting to take advantage of larger houses and larger plots for a fraction of the price they would pay in the metro area. Specifically housing markets such as Portland, Maine, Bay City, Michigan, Pueblo, Colo. And many zip codes in Idaho have become popular destinations for moving since the beginning of COVID-19. In contrast, data from Zillow showed that housing inventory climbed the highest in four major real estate markets – Los Angeles, Chicago, San Francisco, and New York.
“More affordable and medium-sized subway areas across the Sun Belt have seen significantly more people coming than going – especially from more expensive, larger cities to the north and coast,” said Jeff Tucker, chief economist at Zillow.
The new construction of single-family homes is expected to grow this year. Even though new home prices are rising due to an increase in lumber prices, the lack of existing homes for sale means new construction is the only option for some prospective home buyers. The latest data on housing construction is given below.
United States – Housing Price Index 2021 (Latest)
In today’s housing market, buyers are driving up property prices, leading homes to sell rapidly. Some hyperactive buyers make offers without seeing the property and forego contingencies to win bidding wars in the highly competitive housing market. The historically low mortgage rates have fueled an increase in demand, particularly among millennials. However, they are running into a shortage of available housing. Many buyers are still in the hope of finding a home that fits their budget and needs.
Despite popular belief that now is not a good time to buy, many home buyers are looking to lock in their monthly housing payments by taking advantage of still-low mortgage rates. However, in this hot real estate market, it’s difficult for buyers to find a good deal, especially with the typical asking price rising by double digits. Although the housing market is still expected to favor sellers we appear to be at a tipping point in the housing market, where prices have risen so dramatically that buyers are backing off and home sales are slowing down.
House prices rose nationwide in August, up 1.0 percent from the previous month, according to the latest Federal Housing Finance Agency House Price Index (FHFA HPI®). House prices rose 18.5 percent from August 2020 to August 2021. The previously reported 1.4 percent price change for July 2021 remained unchanged.
The 12-month changes ranged from +14.9 percent in the West North Central division to +25.8 percent in the Mountain division. The FHFA HPI is the nation’s only collection of public, freely available house price indexes that measure changes in single-family home values based on data from all 50 states and over 400 American cities that extend back to the mid-1970s.
Source: FHFA
U.S. House Price Index Report 2021 Q2
Due to the brisk demand, purchasers have been frantically bidding up the prices of available houses, sending property prices skyrocketing. House prices in all the major local real estate markets continue to rise. The housing market is becoming harder for home buyers. The demand is high, and the supply and inventory are lacking.
U.S. house prices rose 17.4 percent from the second quarter of 2020 to the second quarter of 2021 according to the Federal Housing Finance Agency House Price Index (FHFA HPI®). House prices were up 4.9 percent compared to the first quarter of 2021. FHFA’s seasonally adjusted monthly index for June was up 1.6 percent from May.
“During the second quarter, house prices peaked in June with an 18.8 percent growth rate compared to a year ago,” said Dr. Lynn Fisher, Deputy Director of FHFA’s Division of Research and Statistics. “For the quarter, annual gains surpassed 20 percent in the Mountain, New England, and Pacific census divisions and in all of the top 20 metro areas.”

House prices have risen for 40 consecutive quarters, or since September 2011.
House prices rose in all 50 states and the District of Columbia between the second quarters of 2020 and 2021.
House prices rose in all of the top 100 largest metropolitan areas over the last four quarters.
Annual price increases were greatest in Boise City, ID, where prices increased by 41.1 percent.
Prices were weakest in San Francisco-San Mateo-Redwood City, CA, where they increased by 4.5 percent.

The top five states with the highest annual house appreciation were:

Idaho 37.1 percent
Utah 28.3 percent
Arizona 23.9 percent
Montana 23.7 percent
 Rhode Island 23.7 percent

The states showing the lowest annual house appreciation were:

Alaska 8.2 percent
North Dakota 8.7 percent
Louisiana 9.6 percent
Mississippi 11.4 percent
Iowa 11.5 percent

Source: FHFA House Price Index Report – 2021 Q2
The housing demand will continue to surge due to several factors. For e.g; the millennials have aged into their prime homebuying years, and they are now the fastest-growing segment of home buyers. In 2018, millennial homeownership was at a record low but the situation has changed markedly. They are no longer holding back when it comes to homeownership. According to the National Association of REALTORS’ Home Buyers and Sellers Generational Trends Report, millennials make up the largest share of the homebuying population at 38 percent. The older millennials (aged 30 to 39) make up 25 percent of that and younger millennials (age 22 to 29 years old) make up 13 percent.
These younger consumers are mostly buying first homes (86 percent of younger millennials and 52 percent older ones). According to Bloomberg, not only are millennials buying homes but their “starter homes” are multimillion-dollar homes rather than the traditional humble first property.
Millennials are expected to continue to drive the market in 2021 and the participation of first-time homebuyers and older millennials is widely forecast to be elevated. Hence, the “2021 housing market” is looking to be super-competitive for home buyers. With homebuyers active and supply still lacking, the current pace of home price growth seems unlikely to change in the near term.
Therefore, homebuyers have to face more competition and act more quickly than usual to snag their dream home. Housing prices had already started rising before the pandemic arrived but the pandemic created a rapid acceleration in double-digits. In a new Urban Institute report, researchers found that if the country continues down the same road, over the next two decades the US homeownership rate is set to decline to 62.1 percent. They project the overall homeownership rate will fall from 65 percent in 2020 to 62 percent by 2040.
Household growth averaged 12.4 million per decade from 1990-2010, 7.3 million from 2010-2020. They estimate an average growth of 8.5 million from 2020-2030 and 7.6 million from 2030-2040. This decline is the result of slowing US population growth and lower headship rates for most age groups. Another key finding is that the renter growth will be more than twice the pace of homeowner growth from 2020 to 2040. Between 2020 and 2040, there will be 9.3 million net new renter households, a 21 percent increase.
The main reason behind such an extreme pace of home price appreciation is the basic economic seesaw of supply and demand. The country needs far more units to meet demand but there has been a large and persistent shortfall in recent years. On top of that, the pandemic has knocked down homebuilders’ ability to fill the housing supply as they are running out of land.
The housing market has already been running too short of previously owned homes. Buyers are scrambling to take advantage of plummeting mortgage rates that make the cost of buying a home much cheaper. The number of homes for sale has plummeted and remained down around 30 percent of what it has been in recent years — leaving the market with nearly twice the demand and two-thirds of the supply.
Both the inventory of homes and mortgage rates are now at their historic lows. The months’ supply of existing homes for sale has fallen to 1.9 months, the lowest level since the series began in 1999. With inventories this tight, it is unlikely that existing home sales can continue to rise at last year’s pace, which means there could be a little slowdown in existing sales throughout 2021. ESR Group expects home sales to rise 3.8 percent in 2021.
The rise in remote work has also sparked a new suburban boom and the scarcity of developed land means that builders could be unable to meet the rising demand and home prices would continue to rise in 2021. One thing that has been talked about a lot is that suburban housing markets are booming because of outbound migration from cities. The pandemic has caused some homebuyers to search for homes in a different area than originally planned.
Various surveys indicate that interest in rural areas and suburbs is up and interest in urban areas is down. However, Zillow published an exhaustive study examining every conceivable housing-market data point related to cities and suburbia to see if there are major divergences that suggest an urban-to-suburban migration trend.
According to that study, suburban housing markets have not strengthened at a disproportionately rapid pace compared to urban markets. Both region types appear to be hot sellers’ markets right now – while many suburban areas have seen a strong improvement in housing activity in recent months, so, too, have many urban areas.
Nevertheless, the pandemic has increased the desire for houses with a bit more space and a garden. Couple that with record-low interest rates, and prices are rising dramatically all over the country from urban-to-suburban markets.
For now, there are no indications that price growth is going to slow. Zillow Economic Research predicts that annual home value growth will rise as high as 13.5% by mid-2021 and for home values to end 2021 up 10.5% from their current levels. Their forecast also calls for sales volume to remain elevated in the coming year, finishing 2021 at 6.9 million sales, the most since 2005.
In previous forecasts, the company predicted a 4.8 percent increase in home values between August 2020 and August 2021. The current extreme demand that is reflected in sharply rising prices, can be attributed to the pent-up demand for home purchases from the March-July period when a great part of the country was in total lockdown.
Housing Market Predictions 2022: Will Prices Go Down in 2022?

With 10 years having now passed since the Great Recession, the U.S. has been on the longest period of continued economic expansion on record. The housing market has been along for much of the ride and continues to benefit greatly from the overall health of the economy. However, hot economies eventually cool and with that, hot housing markets move more towards balance. In 2020, the housing market was running at a record pace in the early stages of the coronavirus outbreak in February, with sellers continuing to gain leverage, and buyers benefiting from lower mortgage rates.
We saw some of the best home sales and housing starts to pace in more than a decade until February 2020. While home prices never declined, they were flat on a year-over-year basis in April 2020, and in May 2020 homes took more than two weeks longer to sell compared to the previous year. As buyer interest rebounded, however, home prices began to climb and sales began to quicken such that by summer homes were selling as quickly as they had the year before, and home prices were growing by high single-digits on their way to double-digit pace.
Before the COVID-19 pandemic came into existence, Realtor.com’s national housing forecast for 2020 was that home price growth will flatten, with an expected increase of 0.8 percent. Inventory was predicted to remain constrained, especially at the entry-level price segment. Mortgage rates were predicted to likely bump up to 3.88 percent by the end of the year. Buyers were expected to continue to move to affordability, benefiting smaller and mid-sized markets. The housing market predictions were pointing out that all the housing indices would trend upward for the nation as a whole as well as in every state, including the top 100 metro areas.
Since the pandemic came into being, the housing market forecast has been running the gamut from optimistic to pessimistic. The fall in GDP associated with the coronavirus pandemic, and the rise in unemployment, was unprecedented in 2020. As the number of coronavirus cases grew and lockdowns began taking effect across the United States, real estate activity slowed dramatically. Both buyers and sellers pulled back from the housing market. According to Zillow, after the third week of March, newly pending sales dropped each week through mid-April, hitting a low of 38.8% below 2019’s figures in a period when sales usually heat up.
Time on the market grew to three days longer than last year in early May, while list price appreciation fell to just 0.1% above 2019. Year-over-year rent growth in the U.S. saw the biggest one-month slowdown in at least five years. About 3 million adults moved in with their parents or grandparents in April, bringing the number of adults living at home to the highest number on record. Despite all of that, there were no signs that the housing market is about to subside. The housing market absorbed the shock relatively quickly and began to recover.
Pent-up demand that was put on hold was unleashed starting in late April 2020, then supercharged by even lower mortgage rates and changes in housing needs. Annual growth in median sale prices peaked at 7.4% the second week of April, before plummeting in the early days of the market freeze and falling to 0.8% by late May. But after the freeze began to thaw, year-over-year growth rose sharply and steadily, hitting new highs of 13.8% by late October (according to Zillow’s data).
Before the pandemic hit the nation the supply of new housing was failing to keep up with demand. Although buyers were eager to close on houses, sellers were not so anxious to list their houses. Inventory was low compared to 2019 to start the year, and that gap widened nearly every week through early December 2020. Due to a very tight inventory, coupled with strong demand from first-time buyers, the housing market began to move incredibly fast. Sellers who did choose to list had little trouble finding motivated buyers who were looking to take advantage of low-interest rates.
After peaking in early May, time on the market began to fall through early November as available homes for sale were scooped up faster. According to Zillow, in September 2020, one in five houses sold above list price – about 50% more than long-term norms. Houses’ typical time on the market reached down to 12 days in October — selling at blazing speeds regardless of price. By November, home values had risen 1.1% since October and 3% since the previous quarter — the largest monthly and quarterly gains in Zillow records going back to 1996.
Inventory declined every week starting in early June – by the week ending Dec. 12, it was 34.3% below 2019 levels. As of the week of Dec. 12, houses were typically on the market a median of just 16 days before an offer was accepted — up a handful of days from lows set in earlier weeks, but still a full three weeks (21 days) less than the same time last year. Zillow expected that 5.7 million existing homes will be sold by the end of 2020, up 5.9% from 2019. This prediction turned out to be true. 2020 was a record-breaking year in residential real estate.
Another prediction by Zillow shows tells us that almost 6.12 million existing homes will be sold in the calendar year 2021, the most sales recorded in a single calendar year since 2005 and the largest one-year increase (21.9%) since the early 1980s. According to some experts, the economic cost we’ve paid to try to contain the virus will weigh down the economy into 2021. That is why home sales are expected to be around six million in 2021 instead of the previously projected 6.30 million.
Economic sentiment affected the U.S. housing market, too. People were reluctant or unable to show their homes, while others were afraid it won’t sell and thus didn’t list their homes. Recovery is also expected to be uneven. Housing markets that are more heavily impacted should expect a slower recovery than markets that were hit less severely. If you’re wondering what the state of the housing market will be like over the next six months, especially if you’re an investor, then here is some good news for you.
The mismatch between supply and demand is driving prices higher, but this isn’t a housing bubble. Many experts were predicting that the pandemic could lead to a housing crash worse than the great depression. But that’s not going to happen. The market is in much better shape than a decade ago. The housing market is well past the recovery phase and is now booming with higher home sales compared to the pre-pandemic period.
Why is there a negative housing market forecast for 2021 amidst the ongoing boom? Well, the foreclosure moratorium has kept lenders from being able to even start their processing of defaults. One of the negative housing predictions is that the supply in the form of foreclosed homes may overwhelm the demand by many folds. The result would be that prices are going to plummet again and the real estate sector will likely cool off.
The major effect will be seen in 2022 because foreclosure that starts today will probably not be processed until mid of 2022. It will be well into 2022 before you will see a spike in single-family and condo foreclosures. First of all the mortgage forbearance must end. Then the backlog of prior foreclosure and eviction cases must be cleared before a wave of new ones can be processed. This creates an incredible buying opportunity in the local housing markets if you can secure funding or have the cash to start buying once this inventory hits the market.
The lack of homes for sale means rental demand should recover alongside the economy, and yields will ease back over 2021 and 2022. However, renters hurt financially by the pandemic will continue to struggle, and rental assistance by the government is needed. Now, we won’t speculate too much about the impending wave of foreclosures and would rather focus on the current housing indicators and their recovery from the lows caused by the pandemic.
Real estate activity has been going on at an unusual pace. The housing sales recovery is strong, as buyers are eager to purchase homes and properties that they had been eyeing during the shutdown. In 2021, interest rates are expected to remain low but would increase gradually. The home prices will continue to appreciate double-digits.
As the population of millennials is increasing, the demand side of housing remains strong. Many buyers need to get into a larger home because they have a growing family. Those interested in purchasing homes are looking at the enticing low mortgage rates.
Housing inventory will remain low, despite plenty of new construction the number of homes for sale would still fall well short of demand in 2021. Buyers will stay focused on the suburbs. We can expect a wave of mortgage refinances to save money.
According to N.A.R, an increasing gap between supply and demand will cause home prices to increase and we can expect further upward pressure on prices for the foreseeable future.
NAR Chief Economist Lawrence Yun continues to project that 2021 will bring about strong economic growth, supported by low mortgage rates and fiscal stimulus, which in turn will bolster existing-home sales. According to Yun, with rates to remain low, existing-homes sales are projected to rise by 10% in 2021 to reach 6.2 million in 2021, while the median home price is anticipated to increase by 9% in 2021 to $323,900. Housing starts are forecasted to reach 1.6 million in 2021 and 1.7 million in 2022, providing much-needed relief to the housing inventory deficit.
Realtor.com’s latest housing market forecast shows that the housing boom will continue but the seasonal trends will normalize.

The existing home sales will increase by 7 percent in the year 2021.
The rise of millennials will push the housing demand up.
Home prices will hit new highs, even though the pace of growth slows.
There would be no double-digit price gains.
The home prices will appreciate by 5.7%.
Single-family housing starts are now predicted to increase by 9 percent.
Low mortgage rates will keep purchasing power healthy, but monthly mortgage costs will rise as mortgage rates are steady and home prices continue to rise.
Mortgage rates will remain low with an average of 3.2% throughout the year.
Buyers seeking affordability and space will drive interest in the suburbs.
The pandemic has merely accelerated this previous trend by giving homebuyers additional reasons to move farther from downtown.
Sellers will get top dollar for their homes.
Fast sales will remain the norm in many parts of the country which will be a challenge felt particularly for first-time buyers

Housing Metrics
Realtor.com 2021 Forecast

Mortgage Rates
Average 3.2% throughout the year, 3.4% by end of year

Existing-Home Median Sales Price Appreciation
Up 5.7%

Existing-Home Sales
Up 7.0%

Single-Family Home Housing Starts
Up 9%

Homeownership Rate
65.9%

According to Zillow, the housing market forecast for 2021 has improved but lingering economic uncertainty may temper some of the predictions. The forecasts for seasonally adjusted home prices and pending sales are more optimistic than previous forecasts because sales and prices have stayed strong through the summer months amid increasingly short inventory and high demand.
The pandemic also pushed the buying season further back in the year, adding to recent sales. Future sources of economic uncertainty, including lapsed fiscal relief, the long-term fate of policies supporting the rental and mortgage market, and virus-specific factors, were incorporated into this outlook.

Their bullish long-term outlook is based on their expectation that tight market conditions will persist, with housing demand exceeding supply.
Zillow expects home values to grow 13.6% between October 2021 and October 2022, and to end 2021 up 19.5% from December 2020.
Home values are expected to grow 3.8% in the three-month period from October to January 2022.
The near-term, three-month forecast is slightly lower than the 4.4% growth expected previously from September to December.
Existing home sales are expected to total 6.12 million in 2021, up 8.5% from 2020.
Also up from their previous forecast of 6.04 million sales this year.
Zillow also increased its longer-term sales forecast, in part due to changes in home affordability.
While rapidly rising home prices pose affordability challenges for many, low mortgage rates have kept monthly payments manageable for those with a down payment.

Source: Zillow
What Will the Housing Market Look Like in 2022?
Forecasts for house prices and the housing market are essentially informed guesses based on existing patterns. The latest housing market trends show that prices are rising in most parts of the country and most price segments because of the lack of supply. Economic activities are ramping up in all the sectors, mortgage rates trend at historic lows, and jobs are also recovering. The latest employment report from the U.S. Labor Department showed that while the U.S. economy added 850,000 nonfarm payroll jobs in June 2021, it is still down 6.8 million jobs from February 2020.
Job openings have surged to a record high of 9.2 million, and as the economy continues to reopen, we expect the economy to continue to mend. Consensus forecasts put full-year U.S. Real GDP growth over 6% in 2021, which would help to close the large gap between the current level of economic activity and potential output. The latest housing market trends show that prices continue to rise in most parts of the country and most price segments because of the lack of supply. On July 15, Freddie Mac, a government-sponsored mortgage buyer, released its latest quarterly housing market estimate for the United States.
The long-term interest rates have fallen recently. The U.S. weekly average 30-year fixed-rate mortgage was 2.9% for the week of July 8, 2021. And, while Freddiemac forecast rates to increase gradually later in the year, they don’t expect to see a rapid increase. At the end of the year, Freddiemac forecast 30-year rates will be around 3.4%, rising to 3.8% by the fourth quarter of 2022. As of now, low mortgage rates are providing opportunities for buyers to lock in low monthly mortgage payments for future years.
Among other factors, the Federal Home Loan Mortgage Corporation forecasted that home price rise in the United States will “moderate” or slow in 2022. According to their most recent housing market forecast, house value growth in 2022 will be less than half of what we’ve witnessed so far this year. The increase in house price growth will be less transitory than the increase in consumer prices, as the U.S. housing market will continue to struggle with a shortage of available housing for many months to come. The analysts predict that property prices in the United States will climb by an average of 12.1 percent in 2021 and there will be a 5.3 percent increase in prices in 2022.
A respite of this kind means a return to normalcy in 2022. If you look at America’s house price history, they tend to rise over the long term, between 3% and 5% every year. According to Black Knight, a real estate and mortgage data analytics company, annual home price growth has seen a 25-year average of 3.9%. In 2019, the average annual price gains marginally decreased to 3.8 percent, the first time since 2012 they have decreased. The significant double-digit gains witnessed over the last year are an exception caused by an overheated US housing market. Such quick price increases are typically unsustainable in the long run, as they exhaust many potential homebuyers.
A 5.3 percent gain in home prices would be more in line with historical trends. Recent figures on house purchase mortgage applications show some signs of weakening demand. And, while sales are above pre-pandemic levels, sales have been slopping for the past four straight months since the first quarter of this year. This is mirrored in Freddie Mac’s house sales predictions, which has total home sales falling to 6.9 million in 2021 and 2022 after hitting a seasonally adjusted annual rate of 7.6 million and 7.2 million in the fourth and first quarters of 2020, respectively.
They also forecast that strong home sales and strong house price rises will increase home purchase mortgage originations from $1.8 trillion in 2021 to $1.9 trillion in 2022. We anticipate that refinance activity will slow as mortgage rates rise, with refinance originations falling from $2.2 trillion in 2021 to $713 billion in 2022. Total originations are expected to fall from $3.9 trillion in 2021 to $2.6 trillion in 2022.
The US housing market is ripe for investment in 2021 & 2022, making it a great time to buy an investment property to increase your cash flow. A multi-generational housing market is creating limited supply and increased competition, driving up prices at the affordable end of the market for the foreseeable future. In hot job markets and communities that fit the youngest generation’s ideals, price increases of 8-15 percent are possible year-over-year.
Real estate is appreciating at or just above the rate of inflation. You will find sellers’ markets in most regions of the country, so you need to prepare for real estate investing accordingly. Find the best investment property for sale and try to get pre-approved for financing well in advance. Paying a mortgage on a home can serve as a forced savings account and help you build equity over time. Lastly, take the help of a good real estate agent/broker to write a great purchase offer and beat out the competition.
United States Rental Market Trends & Statistics 2021
The rental market appears poised to turn the corner and demand for rental units is expected to surge in 2021. While rising rents is a good sign for rental property owners, it will certainly put millions of renters hit hard by pandemic-related income loss in an even more difficult position, and further government intervention will likely be needed to avoid a painful wave of evictions. In general, there are some significant early signs of trend reversals from what the rental market saw throughout the majority of 2020. These shifts, however, don’t come as a total surprise, as the rental market tends to pick up in the New Year after the holiday season.
Below you’ll find various rent reports that highlight year-over-year rent trends and price fluctuations that renters may be experiencing in various parts of the United States. We highlight a few takeaways from multiple sources having an impact on the overall rental market. The multifamily industry continues to face steep challenges brought in by the pandemic. The federal government has included $50 billion as rental assistance as well as other support for apartment residents in the recently passed COVID relief package. However, the latest month’s data is more evidence of a recovering economy and the resilience of the multifamily industry.
The National Multifamily Housing Council (NMHC)’s Rent Payment Tracker found 78.4 percent of apartment households made a full or partial rent payment by October 6 in its survey of 11.8 million units of professionally managed apartment units across the country. This is a 1.0 percentage point decrease from the share who paid rent through October 6, 2020, and compares to 79.4 percent that had been paid by October 6, 2019. This data encompasses a wide variety of market-rate rental properties across the United States, which can vary by size, type, and average rental price.
Source: NMHC Rent Payment Tracker
Zumper’s National Rent Report (October 2021), shows that the median one-bedroom rent in the United States has risen by 11.8 percent since March 2020, and the two-bedroom median is up 14.3 percent over the same period. The median has risen month-over-month in all but one month in 2021. The rapid increases come after a year of mostly stagnant rent in 2019 and 2020. There are a few things driving the increases.
The first is that rent is rebounding quickly in most of the coastal cities that saw precipitous drops after the pandemic hit in March 2020. For example, the median one-bedroom rent in New York, by far the country’s most populous city, was down 17.5 percent in January relative to March 2020 but is now 8.8 percent higher than what it was in March 2020. The conditions for rising rents have been in place for some time; new construction has lagged behind the new household formation, implying that supply is falling short of demand, which drives up the rent.

Following a year of precipitous declines, big cities on the West Coast have seen mostly stagnant rent in 2021, even as rent in the rest of the country has exploded.
But in the last few months, those cities are seeing rent rise again, with one notable exception—the Bay Area.
The major cities in the mountains west have experienced rapid rent growth throughout the pandemic.
But rental patterns in Denver have more closely resembled those among East Coast cities, where rent dropped after the pandemic hit, but is now soaring to all-time highs.
As of now, Denver’s median one-bedroom rent is up a whopping 13.4 percent compared to March 2020.
That’s 20.7 percent rent growth in 2021 alone.
The median one-bedroom rent in Los Angeles is now down just 4.9 percent relative to March 2020.
Seattle (down 3.8 percent) and San Jose (down 9.4 percent) have also crept back up to something close to where they were in March 2020.

Screenshot Courtesy of Zumper.com
Apartment Guide’s October 2021 Rent Report highlights year-over-year rent trends and price fluctuations that renters may experience in various parts of the United States. They compare rent prices for the studio, one-bedroom, two-bedroom, and three-bedroom apartments to determine which unit types and which of the country’s most populated cities are becoming more affordable or more expensive for renters.
National Average Rent Price Trends
On a national level, rent prices are up both short and long-term. When compared year-over-year, rent prices for both one-bedroom and two-bedroom apartments have increased significantly at about 20 percent each.

1-BR: $1,660 (+7.7 percent from prior month / +19.8 percent year-over-year)
2-BR: $1,964 (+7.1 percent from prior month / +18.9 percent year-over-year)

State Average Rent Price Trends
The statewide data shows that across the country, rent prices are on the rise. More than 90 percent of states have seen an increase in monthly rent prices for both one- and two-bedroom apartments.

1-BR: 96 percent of states are up and four percent are down
2-BR: 98 percent of states are up and two percent are down

City Average Rent Price Trends
The top 5 cities have experienced the biggest increases in one-bedroom rent prices year-over-year.

Gilbert, AZ (+116.5 percent)
Spokane, WA (+69.3 percent)
Long Beach, CA (+66.3 percent)
New York, NY (+58.2 percent)
St. Petersburg, FL (+56.7 percent)

The top 5 cities have experienced the biggest decreases in one-bedroom rent prices year-over-year.

Huntsville, AL (-25.9 percent)
Greensboro, NC (-13 percent)
Philadelphia, PA (-12.5 percent)
Saint Paul, MN (-12.2 percent)
Memphis, TN (-10.1 percent)

The top 5 cities have experienced the biggest increases in two-bedroom rent prices year-over-year.

Santa Ana, CA (+60.2 percent)
Huntington Beach, CA (+58.5 percent)
Reno, NV (+57.9 percent)
Hialeah, FL (+49.2 percent)
Fresno, CA (+46.5 percent)

The top 5 cities have experienced the biggest decreases in two-bedroom rent prices year-over-year.

Philadelphia, PA (-22.4 percent)
Plano, TX (-18.6 percent)
Rochester, NY (-18.2 percent)
Colorado Springs, CO (-15.1 percent)
Baltimore, MD (-14.2 percent)

November 2021 Apartment List National Rent Report shows while rent growth has slowed significantly from its July peak, it is still outpacing pre-pandemic trends, with rents continuing to rise during a season when prices typically fall. The national median rent has increased by an astounding 16.4 percent since January of this year. To put that in context, rent growth from January to October in the pre-pandemic years of 2017 to 2019 averaged just 3.2 percent.
Their national index increased by 0.8 percent from September to October, the lowest month-over-month growth rate since February. 22 of the nation’s 100 largest cities saw rents fall this month, ending a six-month stretch in which virtually all of these cities were experiencing uninterrupted rent growth. In particular, Boise saw the nation’s sharpest decline in rents this month, with prices down 3.1 percent from September to October.

Although the pandemic dampened the rental market last year, 2021 has seen the fastest rent growth in their data.
Rent growth in 2021 has exceeded pre-pandemic averages nationally and in nearly all individual cities.
However, this month, that record-breaking growth began to show signs of a meaningful slowdown.
The national median rent rose to $1,312 this month.
Rents grew by 0.8 percent this month nationally, the third straight month that growth has slowed, after peaking at 2.6 percent in July.
Rent growth cooling almost everywhere in the US housing markets.
From March through September, virtually all of the nation’s 100 largest cities have experienced rapid and uninterrupted rent growth.
5 of the 100 largest cities in the U.S. saw slower rent growth this month compared to last.
And 22 of these cities actually saw rents fall this month, the most since January.
Remote work and the economic fallout of the pandemic will undoubtedly continue to impact local rental markets going forward.

Graph Credits: Apartmentlist.com
September 2021 Data by Realtor.com shows that rents across the country reached new highs, again growing by double digits for the second consecutive month after first reaching the milestone in August. Now, the national rent has reached $1,654, up 13.6% year-over-year, and growing over four times as fast as the 3.2% growth rate seen just before the pandemic hit in March 2020. Rents continue to make up for a lost time during the pandemic when many areas saw rents essentially freeze or decline.

September 2021 data: In the 50 largest metros, the median rent was $1,654, up 13.6% year-over-year. This translates to an additional $198 per month for renters.
Compared to September 2019, the median rent has increased by $222 (15.5%).
September marks the second consecutive month where national rent growth has reached double digits (13.6% Y/Y).
After experiencing significant declines during the pandemic, rents in the nation’s major urban technology hubs, including New York City, Los Angeles, and Chicago, are now surging.
Rents in technology centers increased 7.6 percent year over year in September, after falling 15.8 percent earlier this year.
Rents by size: Studio: $1,351, up 11.3% ($137) year-over-year; 1-bed: $1,542, up 13.7% ($185);  2-bed: $1,855, up 14.4% ($233).
Rents for all unit sizes are at series highs.
Rents are increasing the most in Tampa, FL, and Miami, FL, each seeing over 30% year-over-year rent growth.
Riverside, CA; and Phoenix, AZ metro areas round out the top of the list, each seeing over 26% growth.

Riverside, CA was the fastest-growing metro area, with the median rent reaching $2,112 in June, up 24.2% year-over-year. The other metros topping the list of fastest-growing rents were Memphis, TN; Tampa, FL; and Phoenix, AZ, which all saw rents growing by over 20% compared to last year.
Source: Realtor.com
RESIDENTIAL VACANCIES AND HOMEOWNERSHIP RATES
Vacancy rates affect the price of housing. In a market in which there are a lot of vacant homes or apartments, prospective tenants or buyers are at an advantage. On the other hand, in a market in which vacant homes or apartments are scarce, the power dynamic is reversed. The landlords (or sellers) are in a position to tend to bid up the rents. Therefore, when there is an unusually low vacancy, the price of housing will tend to be bid up over time. When there is an unusually high vacancy, the price of housing will tend to be bid down over time.
Let us see how this pandemic-led economic slowdown has impacted the vacancy rates nationally as well as regionally. The vacancy rate is somewhat analogous to the unemployment rate. If the unemployment rate increases, it has a direct impact on vacancy rates. While rental vacancy rates are slightly higher this year compared to last, they remain lower than we’ve seen historically. The Census Bureau reports rental vacancy and homeownership vacancy rates each year through its American Community Survey; you can get these at the city level or in some cases for even more fine-grained areas.

In the third quarter of 2021, the median asking rent for vacant for-rent units was $1,203.
In the third quarter of 2021, the median asking sales price for vacant for-sale units was $285,500.
Approximately 89.3 percent of the housing units in the United States in the third quarter of 2021 were occupied and 10.7 percent were vacant.
Owner-occupied housing units made up 58.4 percent of total housing units.
Renter-occupied units made up 30.9 percent of the inventory in the third quarter of 2021.
Approximately 1.9 percent of the total units were vacant for rent.
0.5 percent were vacant for sale only and 0.9 percent were rented or sold but not yet occupied.

National Vacancy Rates
According to the U.S. Census Bureau, the national vacancy rates in the third quarter of 2021 were 5.8 percent for rental housing and 0.9 percent for homeowner housing. The rental vacancy rate was 0.6 percentage points lower than the rate in the third quarter of 2020 (6.4 percent) and 0.4 percentage points lower than the rate in the second quarter of 2021 (6.2 percent).
Usually larger metro areas have an advantage when it comes to rental properties. They have an abundant supply of renters in the high-income bracket with more disposable income who are willing to compete for the best apartments and rentals. However, industry experts are seeing more positive conditions in many suburban markets. Buyers of apartment properties are returning to the market, spurred by historically low-interest rates and increased equity financing availability.
The rental vacancy rate outside MSAs (6.4 percent) was higher than the rate in the suburbs (4.7 percent). The rate in principal cities (6.6 percent) was also higher than the rate in the suburbs. The rates in the suburbs and outside MSAs were lower than the third quarter 2020 rate, but the rate in principal cities was not statistically different from the third quarter 2020 rate.
The rental vacancy rate was highest in the South (7.2 percent), followed by the Midwest (6.3 percent). The rates were lowest in the Northeast (4.3 percent) and West (4.4), and these two regions were not statistically different from each other. The rates in the Northeast and West were lower than their third quarter 2020 rates. The rates in the Midwest and South were not statistically different from the third quarter 2020 rates.
Courtesy of Census.gov
The Homeownership Rate
The homeowner vacancy rate of 0.86 percent was lower than the rate in the third quarter of 2020 (0.95 percent) and virtually the same as the rate in the second quarter of 2021 (0.86 percent). The homeownership rate of 65.4 percent was 2.0 percentage points lower than the rate in the third quarter of 2020 (67.4 percent) and virtually the same as the rate in the second quarter of 2021 (65.4 percent).
The homeowner vacancy rate in principal cities (1.1 percent) was higher than the rate in the suburbs (0.8 percent) but not statistically different from the rate outside MSAs (0.9 percent). The rate outside MSAs was lower than the rate in third-quarter 2020, and the rates in principal cities and suburbs were not statistically different from the third quarter 2020 rates.
The homeowner vacancy rate in the Northeast (1.0 percent) was higher than the rate in the Midwest (0.7 percent). The rates in the Midwest, the South (0.9 percent), and the West (0.8 percent) were not statistically different from each other, and the rate in the Northeast was not statistically different from the South and West. The rates in all regions were not statistically different from the third quarter 2020 rates.
Courtesy of Census.gov

References
Latest Housing Market Data & Statistics

Real Estate Trends

Blog

http://www.freddiemac.com/research

Hottest Markets Blog

https://www.nar.realtor/research-and-statistics/housing-statistics/
https://www.fhfa.gov/DataTools/Downloads/Pages/House-Price-Index.aspx
https://www.zillow.com/research/daily-market-pulse-26666/

U.S. Home Price Insights

2021 Housing Market Forecast and Predictions

http://www.freddiemac.com/research/forecast/20210715_quarterly_economic_forecast.page
https://www.nar.realtor/research-and-statistics/housing-statistics/housing-affordability-index
https://www.investopedia.com/personal-finance/how-millennials-are-changing-housing-market
Economic Outlook
https://www.bea.gov/data/gdp/gross-domestic-product
https://www.businessinsider.com/us-housing-market-sudden-lack-of-consumer-interest-coronavirus
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