The resale housing market moved in two bursts in 2021 with composite benchmark prices increasing 11% between January and June and a further 4% increase between September and December. With inventory drawn down to around 5,600 listings at the end of January 2022, today’s market is unable to absorb even modest increases in demand without moving prices substantially.
With persistently strong demand and new listings unable to keep up, benchmark prices have risen 36% for detached, 28% for attached, and 13% for apartments since the beginning of the Covid-19 pandemic in March of 2020. Looking ahead into 2022, home price growth will come back toward longer-term averages as rising mortgage rates, and price levels squeeze some potential buyers out of the market. As can be seen below, even a normalizing of the number of buyers and sellers in the market will take 18 to 24 months for the listings inventory to recover from the severe drawdown that’s ocurred in the market since the fall of 2020.
Highlights
•Listings remain stubbornly scarce in the early part of 2022, inventory will not build until sales fall;
•Mortgage rates are expected to rise and the stress-test rate is expected to remain at in 2022;
•Sales are expected to fall from 2021 levels due to deteriorating affordability;
•Extreme upward price pressure remains at the start of 2022;
•Prices are expected to rise in 2022, but the majority of upward moves will happen in the rst half of the year.