Single-family home for-sale listings are expected to reach record highs in 2022, surpassing the previous record of 7.6 million set in 2018.

In 2021, nationwide home prices rose a staggering 19%. Besides spooking buyers, prices had a side effect of stagnating mid-tier sellers – whether they were waiting for values to top out, or simply paralyzed by sticker shock for the houses they would like to buy.

Anticipated rising mortgage rates should put the brakes on prices a bit. With a massive backlog of demand, most home shoppers will still face some face competition, but it shouldn't be as intense as the pitched battles of 2020 and 2021.

And with the more stable market, current homeowners will likely find the idea of listing their home less daunting. Contingent offers - allowing homeowners to make offers on the condition their existing home sells first – should become more common.

The end of double-digit price growth may also encourage reticent older homeowners to finally sell, convinced prices are nearing their ceiling.

Emergency mortgage forbearances also ended at the close of 2021, and hundreds of thousands of troubled homeowners will likely be listing their homes, too.

With rents expected to rise by a national average of 7%, with much higher rates in many metropolitan areas, many renters will likely be looking to purchase homes as well, despite home affordability challenges.

Slower price growth will likely discourage all-cash investors, giving more first-time buyers a shot at making successful bids. The new home market should also increase. Builders are doing what they can to match demand and circumvent roadblocks from labor shortages, lot delays and supply chain challenges.

Still, down payments can be intimidating.

Your trusted local Bay Equity Loan Officer can help guide buyers with more opportunities to buy. There are many down payment assistance (DPA) programs, including federal FHA, VA and USDA loans, as well as dozens of other public and private local programs.

Sun Belt cities like Phoenix, Atlanta and Austin, TX, saw explosive population growth during the pandemic, which led to explosive price growth.

On the other hand, many cities in the so-called Rust Belt of the Upper Midwest – Columbus, OH, Harrisburg, PA, and Indianapolis - still have median prices below $250,000. These areas should garner more attention from price-conscious shoppers.

Expect the market to remain strong throughout 2022, with continued low supply, but not quite as hectic as 2021.