2022 Housing Market Outlook


The housing market has been a constant thread in news headlines in the past year. If you are a potential homebuyer, it is understandable that you may be sitting on the sidelines wondering what is in store for 2022. Predicting the housing market is a bit like looking into a magic 8-ball. However, deciding to buy a home doesn’t have to take a gaze into the crystal ball. When it comes to buying a new home, being aware of market dynamics is helpful. However, a homebuyer will have the most success armed with information and a plan. With that said, here is what we are seeing:


Austin was sizzling last year at record rates, so what can we expect this year? The market did see what some of us are cleverly calling a “calming” trend. According to National Association of Realtors (NAR), the market overall will remain strong. If we look at the days on market, it is still trending According to Zillow, the Austin market will continue to have a fast-paced seller’s market. With the big companies like Tesla moving here, we will see demand holding strongly as we experience a strong job market.

Additionally, the trend for homebuyers to move to Austin will overflow to more affordable areas. Furthermore, the demand in Austin has ticked up home values to one of the highest in the nation. Therefore, we will likely see some of the spotlight fade out to other metro areas which are more affordable.

The pandemic has had an impact on potential sellers. However, two years in to this new normal may have some sellers feeling more comfortable which will help with supply. Additionally, new housing supply will continue to be slow. We hear from builders that supply-chain issues will slow down execution of new build. These supply-chain challenges will also impact renovation and remodels. If you are a buyer, preparedness and patience will be key!


Most people are aware of quickly increasing prices on, well, just about everything they purchase. When prices rise, it’s called inflation. While some inflation is good for the economy, unchecked inflation is not. When inflation/prices go up, interest rates rise, too. Why? Well, it costs more to borrow as banks and lenders need to offer higher rates to investors thus raise rates to borrow.

The Federal Reserve

While the Federal Reserve’s mandate is monetary policy, one of their charges is governing inflation. Whenever they meet or release a statement, it garners attention from the media and the investing community. Lately, Fed Chair Powell as indicated that, indeed, prices are rising faster than they expected, so he expects the Fed to increase the Fed Funds rate at a faster clip AND will curtail Fed purchasing of assets.

What does that mean for mortgages?

First, the Fed Funds rate is the overnight borrowing rate for very large banks. It really doesn’t affect you as an individual mortgage borrower, but it does set the direction of where rates are going as that change will have a ripple effect downstream to other rates like credit cards, cars, and lines of credit. So, rates will be going up as banks will need to pay investors a higher rate of return and thus will charge you a higher rate.

More importantly, to keep the economy going during Covid, the Fed has been purchasing assets. This means, the federal government has been buying US Treasury bills and bonds to keep money flowing. That has kept our interest rates low. Mortgage rates are directly tied to US Treasuries. As they curtail these purchases, the US Treasury will have to offer higher rates to other investors to backfill the void left by the US Government. Fortunately, our country’s debentures are deemed the most secure in the world which will keep rates lower.

So, while rates will be going up, they will not skyrocket north. I expect rates to slowly climb throughout 2022. How far? Who knows but rates in the  4% range isn’t out of the question. The good news is that we have a great lock and shop program. Therefore, you can lock in a great rate and shop without worrying about your rate.


Whether you are first time home buyer or a seasoned investor, I’m available to help. Simply connect with your questions and we will be happy to get back to you.

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