Economic Forecast

November 15, 2021 - Housing & Economic Forecast for 2022

Below is Gardner's forecast for economic growth through the end of 2022.

The impacts of Covid-19 are going to continue to act as a drag on virus sensitive consumer services next year and ongoing supply chain issues will also delay inventory restocking. Both of these have a depressing effect in more ways than one on economic growth.

Gardner doesn't see any chance of falling back into a recession. The country has added around 200,000 jobs per month. He expects to see the country return to pre-covid employment levels in the second half of the year. With jobs continuing to return he predicts the unemployment rate will trend lower.

With the expiration of enhanced unemployment benefits and with wages rising significantly, prospective jobs for people currently unemployed are looking rather good.

The labor force is still down by 3 million, and businesses are still having trouble finding employees which raises the expectation that inflation will remain higher for longer. Here is his final economic forecast is his outlook for inflation.

Turning the attention to the housing market, Gardner does not expect to see an increase in existing homes sales, mainly due to ongoing supply limitations and rising affordability issues. Prices rose by 16.4% in 2021, this pace of appreciation has never been seen before. This pace of growth is unsustainable and he expects to see the pace of growth slow to a rate of 7.3% in 2022.

Mortgage rates are expected to raise in 2022, but he does not expect them to break 4%.

Although, these rising rates will also price some Buyer's out of the market. Slowing growth in existing home prices and sales will be a function of additional supply.

This chart shows Gardner's forecast for new home starts:

While Gardner does not predict we are in a housing bubble, he does voice concern about the affordability issues particularly for millennials. This generation is getting older and will begin to have children, but fears many of them will not be able to afford a home in this market.

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Looking for an economic update on the Real Estate Market each month? This page provides monthly videos from Matthew Gardner (Windermere's Chief Economist) about all his predictions for what's ahead in this crazy housing market. You will also find highlights from the videos if you do not have time to watch!

A Master Class In Mortgage Rates

This months Monday’s with Matthew focuses on mortgage rates and what we can expect for the future. Gardner gives a crash course on how mortgage rates are set. There are many factors that impact the rate a homebuyer will get, which include credit scores and loan to value ratios, but the base rate is set […]
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How Do Buyers & Sellers Feel About the Housing Market?

  This months Monday’s with Matthew focuses on the latest Home Purchase Sentiment Index Survey. This is a survey that focuses primarily on housing and it shows the responses of 1,000 consumers across the country. Gardner shares data about about the housing market regarding buying, selling, and if home prices will go up or down […]
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Housing and Economic Update

  Gardner jumps right into the data releases that came out in August and starts with the new housing permits and starts. New home permits (single family permits) fell by 17% in July and they have been heading backwards since March. Although we have seen a pull back over the past few months the trend […]
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Update on Homes in Forbearance

  This was a great month to look at the data for the number of homes in forbearance as the program stopped taking new applications at the end of June. The situation today is a vast improvement from where we were last may. More than 4.76 homes were in the program last May, but by […]
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Housing Affordability Declines as Prices Continue to Rise and Incomes Fall

By: Michael Hyman, A RESEARCH DATA SPECIALIST FOR THE NATIONAL ASSOCIATION OF REALTORS®. At the national level, housing affordability declined in April compared to a year ago, according to NAR’s Housing Affordability Index. Affordability declined in April compared to March as the median family incomes declined by 1.0% while the monthly mortgage payment increased 16.1%. The […]
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Is a Housing Bubble on the Horizon?

  Today’s Monday’s with Matthew looks a bit different. While this 30 minute video is longer than the others, it is full of great information regarding the history on the housing crash in 2007 and whether or not we are in the midst of a housing bubble.
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Inventory, Mortgage Rates, and New Construction

Matthew Gardner’s latest video on the housing market is full of important information regarding inventory, mortgage rates, future predictions, and new home builds. There continues to be an extremely limited amount of inventory, but Gardner is still expecting that the number of home sales will increase by more than 11% compared to last year. With […]
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Home Ownership Rates

Matthew begins with information on the current home ownership rates and dives into the data regarding home buying and the younger generation. The ownership rate for millennials is increasing and the current rate of 38.5% is a share not seen since back in 2011. Gardner believes this number will continue to rise over the next […]
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Housing & Economic Update

Matthew came out with his first video for 2021 and it’s full of great information! If you don’t have time to watch the full video we have provided some highlights below. Starting with The National Association of Home Builders report we can see that the index has slipped from 86 to 83, but builder’s still […]
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The 2021 Housing Forecast

This past year mortgage rates have broken record lows, and we have watched them drop week after week. Matthew Gardner predicts that rates will most likely bottom out in the current quarter but he doesn’t see mortgage rates increasing significantly next year. Regarding existing home sales, Matthew Gardner forecasts that sales should be up by […]
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The Latest US Home Sales Data 

Existing home sales rose for the 5th consecutive month, and sales are 26.6% higher compared to a year ago. As sales rose in October, so did prices. The median home price in October was up by 15.5% compared to a year ago, and we haven’t seen that pace of price growth since 2006. Mortgage rates […]
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Housing Affordability Index

Quick Update from Matthew Gardner: How Will Election Results Impact the Housing Market? Michael Hyman is the National Association of Realtor’s Research Data Specialist. Below is his most recent article from November 13, 2020, discussing the housing affordability index, median family income, and mortgage rates. “At the national level, housing affordability declined in September 2020 […]
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Analyzing the US Job Market

Jobs continue to return, but the pace has slowed significantly. The country added 638,000 jobs in October, which was surprisingly strong due to the current rate of COVID-19 cases. It’s good to see the unemployment rate drop, but the amount of people who have been unemployed for more than six months has increased by 1.2 […]
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The Latest Housing Information

  At the end of Matthew Gardner’s video he states that the housing market continues to outperform, but the pace of price growth is not sustainable and while it has to start tapering off at some point it isn’t quite there yet. Check out the graphs below or watch his video to see what was […]
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Interest Rates and Housing Affordability

What this means in layman’s terms, is the low interest rates have fueled the housing market. This is causing home values to go up faster than interest rates are dropping. As a result we could find many buyers getting priced out of the market. When buyers exit a sellers market, supply and demand is affected. […]
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I hope you enjoy our economic update, if you have any questions regarding the housing market or would just like to chat please feel free to reach out to me here.

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