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‘Home price growth may return to normalcy.’ 5 economists and real estate pros predict what will happen in the housing market in 2022

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Predictions on mortgage rates, housing prices, and more.

It’s been a wild ride for home buyers and aspiring home buyers over the past year, with bidding wars and rising prices — as interest rates held near historic lows (see the lowest rates you might qualify for here). Here’s what five economists and real estate pros told us they thought would happen in 2022.

Prediction 1: Mortgage rates will rise

“Mortgage rates snapped upward in January as mortgage investors realized what the Fed intends to do, which is raise interest rates aggressively this year,” says Holden Lewis, home and mortgage expert at NerdWallet. “Now, mortgage rates are rising more gradually as markets wait for the Fed to clarify their timetable.”

“For perspective, the 30-year mortgage averaged 4.09% in the 2010s and 12.71% in the 1980s, people bought plenty of houses in both eras,” says Lewis. This month, Bankrate’s chief financial analyst Greg McBride says he expects 30-year fixed rate mortgages to average between 3.65% and 3.85%, with the 15-year fixed ranging between 2.8% and 3%. “The bulk of these rate increase moves were made in January as markets reset their expectations on the Federal Reserve. Moves in the next few weeks, however, should be more subdued,” says McBride.

But with rates rising for the past few months, reaching their highest levels since March 2020, Gregory Heym, chief economist at Brown Harris Stevens, says they are likely to continue to rise as the Federal Reserve tapers its bond purchases, which will lead to a rate hike most likely in March. Of course, mortgages go up and down week to week, but Lewis says: “Expect more up weeks than down weeks in 2022.”  (See the lowest rates you might qualify for here.)

Even though the Fed doesn’t directly control mortgage rates, the overall tightening policy of stopping the purchase of mortgage-backed securities and raising of the short-term Fed funds rate will push mortgage rates up. In fact, Lawrence Yun, chief economist at the National Association of Realtors, says: “The average rate on a 30-year fixed rate mortgage is likely to reach 3.8% by the fourth quarter.”

Prediction 2: Home price growth may ‘return to normalcy’

Heym says the market is suffering from record-low inventory levels, which has driven prices to new highs even as the number of sales has declined. “I don’t expect this to change in the next few months as home builders can’t build houses fast enough to help the supply issue,” says Heym. Specifically, Yun says home prices are solidly higher by double-digit percentages compared to one ago. “However, with mortgage rates moving up and some home buyers getting priced out, home price growth will return to normalcy, to around 5% for all of 2022,” says Yun.

Prediction 3: Expect near-term bidding wars

The clock is also ticking as 2021 interest rate locks with 60-90 day expirations are set to mature any day. But what does this mean for buyers? Essentially, they’re rushing and overbidding on properties in the hopes of securing a low interest rate before the next Fed increase. “This is causing bidding war frenzies,” says Pierre Debbas, managing partner of real estate law firm Romer Debbas LLP. 

Prediction 4: It will still be a tough market for buyers though

Buyers will continue to have limited options in most areas as inventory will remain scarce, pros say. “Prices will continue to rise, which combined with higher mortgage rates, will drive some buyers out of the market,” says Heym. That said, it will continue to be a strong seller’s market, which means if you’ve been thinking about listing your home — there’s no time like the present. 

While power will remain firmly in the hands of sellers this year, according to Nicole Bachaud, a Zillow economist, prices will rise substantially. “We’re seeing monthly growth accelerate earlier in the year than normal, but we don’t expect they’ll rise quite as much as they did in 2021,” says Bachaud. According to data from Zillow, home values in 2021 ended up 19.6% for the year and the forecast calls for 16.4% growth in 2022.

Prediction 5: But there are still wildcards

The big wildcard is the permanency of work-from-home policies or even hybrid models of employment. “That will lead to changes in residential locational choices with more households willing to buy a home farther away from job locations and home price growth therefore will be stronger in small towns and exurbs compared to downtown locations,” says Yun.

Prediction 6: Spring will bring more activity

With the spring home shopping season right around the corner, expect activity to heat up. “It’s likely inventory and sales will pick up over the next few months,” says Bachaud.

Learn more on Market Watch.

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Millennial Demand Is Driving Prices Up in Neighborhoods With Kids

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With a record number of millennials set to reach key age milestones for homebuyers over the next two years, experts say this could push already accelerated price gains even further. 

This, according to a new report from Zillow that found home values are growing fastest in areas with the highest share of kids, reflects the impact millennial house hunters are making on family-friendly neighborhoods already experiencing a shortage of homes for sale.

According to the report, the top 10% of ZIP codes with the largest share of kids in each county analyzed saw an average of 21.3% growth from October 2020 to October 2021, compared to 17.6% in ZIP codes with the smallest share of kids. This trend started in 2013, which, not coincidentally, was the year the oldest millennials turned 32, the age when many new parents buy their first homes. That’s the median age of first-time home buyers and one year older than the median age of fathers with newborns, Zillow’s report stated.

“As millennials go, so goes the housing market, and we are seeing now, as millennials age, that they are looking for homes that fit the needs of growing families,” said Zillow economist Nicole Bachaud. “Millennial demand has helped push up home prices in areas with the most children. Competition for homes in these family-friendly areas should intensify in the coming years as more millennials reach the key age of 32, adding to the affordability squeeze.”

Zillow’s report analyzed 421 U.S. counties, representing 71% of the country’s population. ZIP codes with more residents under 18 years old are associated with higher home value growth in nearly two-thirds of the counties studied. Many of the counties where this relationship does not hold true are vacation destinations, where part-time residents have unconventional housing demands. Home value growth in these family-friendly areas began to outpace nearby ZIP codes in 2013, and the correlation between kids and home value growth has been nearly perfect for each year since 2017, according to the report.

That first wave of early-30s millennials had the benefit of discounted home prices because of the Great Recession; home values in these family-friendly ZIP codes were hit particularly hard between 2008 and 2011, during the nationwide housing crash. Today’s first-time home buyers are encountering a much different market, especially as home price growth has reached record highs during the pandemic.

Kristi Ramirez-Knowles, a REALTOR® and team leader for Your Home Sold Guaranteed Realty working in West Los Angeles, told RISMedia late last year that millennials are often forced to look at areas near or abutting these traditional family-friendly zip codes, because the most attractive markets have no homes within their budget.

“It’s pushed further,” she says. “Other places where it wasn’t very family friendly, now it’s starting to get very family friendly because they’re building brand new construction with everything built in—with the pool and the rec room, and that’s drawing to those areas. That’s attracting families even though the school district may not be that great. It’s the appeal of brand-new and something they can afford.”

That also seems to be the case on the other side of the country, as Virginia-based agent Kathryn Kramer with Howard Hanna, suggests that the Norfolk housing market has seen similar behavior.

“I think that this effect is compounded by two factors,” Kramer says. “Empty-nesters are more hesitant to move because of the pandemic, and we have fewer of those homes on the market. Also, more millennials are working from home which has allowed markets like ours to flourish because people who can now work remotely are moving to areas that have better schools and amenities and a lower cost of living.”

Kramer went on to say that some of the neighborhoods that are not traditionally thought of as first choices for families are going to start improving as people start getting priced out of other neighborhoods.

The snowball of millennials reaching peak age for first-time home buyers has grown during the past nine years and is about to turn into an avalanche, Zillow reported. Nearly 200,000 more Americans will turn 32 this year than did so in 2021―the biggest jump since the transition from Generation X to millennials in 2013—and even more will do so in 2023. This demographic reality should fuel even faster price growth in family-friendly ZIP codes over the next two years, making saving for a down payment even more challenging for first-time buyers.

This effect, the report states, is strongest in counties that encompass the cities of Norfolk, Virginia; Washington, D.C.; Portland, Oregon; Austin, Texas; and Seattle. Counties where this trend does not hold true include those encompassing Galveston, Texas; Santa Barbara, California; and Ocean City, New Jersey.

Read more on RISMedia.

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Spring cleaning in 2022: 3 methods designed to declutter your home and mind

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With spring fast approaching, it’s understandable that many of us want to get our homes and minds as clear as possible – and these decluttering techniques are designed to help.

It might not feel like it now, but we’re rapidly speeding towards spring – which is, famously, considered to be a time of renewal.

It’s around this time that many of us will be hit by the sudden urge to declutter our homes, but it can be difficult to know where to begin, especially when you suddenly realise just how much stuff you truly own.

How, then, should we go about getting rid of things we no longer need? Why, by striving to make our home environment an extension of who we are and opting for a meditative decluttering method, of course. 

Oosouji

In Japan, there is a practice called oosouji, which literally means “big cleaning.”

According to Ayin, this is usually conducted at the end of each year or school term, and it asks people to not just sweep away dust but to clean away the negative energy of the past. 

In doing so, the hope is that they will declutter their homes, hearts and minds ready for the new year ahead.

How to cultivate oosouji in your home:

  • As per Ayin, we must always start the oosouji ritual by the entrance of each room and “work our way clockwise to end where we started, with a fresh state-of-mind.”

  • Work from the top of the house and downwards (begin by dusting off the ceilings, and so on).

  • Focus on removing all stains from furniture and homeware (they are said to “remind you of the past in a negative way”).

  • Place boxes in all rooms for items that are no longer needed. When you’re done, drop these boxes of at a charity shop.

  • Set one box aside for rubbish, too, and be sure to remove it immediately whenever you finish with a room.

FlyLady

The FlyLady technique – so named due to founder Marla Cilley’s love of fly fishing – works by breaking all household tasks into small, manageable increments.

However, it also works as a self-love exercise – which is why it has been retroactive rechristened the “Finally Loving Yourself (FLY)” technique. 

How to cultivate the FlyLady technique in your home:

  • As previously reported by Stylist, the technique starts with “babysteps”, some 31 small things that can be done around the house every week in order to build up your decluttering habit. Breaking it up into smaller duties makes it more manageable, says FlyLady, providing you with a sense of peace.

  • Separate your home into five different zones. The first week of the month is dedicated to zone one. Set aside 15 minutes a day to eliminate any clutter that has accumulated throughout your home. Repeat with zone two the following week, and so on until the month is complete.

  • Ensure you are only cleaning for 15 minutes at a time, and be sure to use a timer to keep track. This should not be a rushed and stressful process.

The KonMari method

The KonMari Method is Marie Kondo’s minimalist-inspired approach to tackling your stuff category-by-category rather than room-by-room.

The aim? To be left with a home filled with items that “spark joy.” 

How to cultivate the KonMari method in your home:

  • As per Marie Kondo’s website, we must begin the process by committing ourselves to tidying up.

  • Imagine your ideal lifestyle and keep that in mind throughout; anything that won’t help you on this journey isn’t deserving of your space or you.

  • Remember, it’s only after you’ve discarded can you turn your full energy and attention to that which brings you joy. Go through and get rid of items you no longer need or cherish, and remember to do so with gratitude.

  • Tidy by category – clothes, books, papers, komono (miscellaneous items) and then sentimental items – not location. And always, always follow this order.

  • Create an environment that makes you happy by going through all items and asking if they spark joy. Of course, joy looks different to everyone; however, Kondo herself describes it on her website as “a little thrill, as if the cells in your body are slowly rising.”

For even more cleaning methods, visit Stylist UK.

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10 Top Adventure Spots in Central Oregon

 
 

Central Oregon’s moon-rock landscapes, high-desert sagebrush, forested mountain trails, and easily accessible rivers and lakes are places ripe for summertime fun.

Hop on a bike, book a rafting or fishing trip, or set off on a quiet trail to explore otherworldly geological formations. The crisp air and sunshine-filled days of Central Oregon are calling. Here are 10 top adventures to explore.

Newberry National Volcanic Monument

If you truly want to get off the grid in Central Oregon, take a trip through Newberry Country and prepare to be wowed by awe-inspiring geology and wildlife at every turn. The Lava Lands Visitor Center gives a great overview of how the monument includes more than 54,000 acres of lakes, lava flows and other spectacular geologic features. A trek up to Lava Butte — the cinder cone rising 500 feet above the center — showcases panoramic views of the Cascade Mountains, Newberry Caldera and Paulina Peak. See real black lava rock as you stroll the lakeside trails, or glimpse the impressive twin 80-foot cascades of Paulina Falls plunging from the cliff into the pool below. If you’re wondering, Newberry Caldera sits atop an active volcano — a very big one, about the size of Rhode Island — but as the last eruption was 1,300 years ago, there’s no reason to expect another anytime soon.

County: Deschutes County
Cities: La Pine, Sunriver, Bend
Where to stay: LaPine State Park, East Lake Resort, Sunriver Resort

Mt. Bachelor

Fun fact: This iconic Central Oregon peak was named Mt. Bachelor because it “stands apart” from its neighboring peaks, the Three Sisters. Topping just over 9,000 feet, it’s a stratovolcano (steep, with many layers from its past eruptions — the most recent being 8,000 to 10,000 years ago). Today Mt. Bachelor is the ultimate playground for outdoor adventurers, with its popular summer lift offering access to hiking trails, an 18-hole summer disc golf course, and flowy singletrack at the Mt. Bachelor Bike Park. Get ready for a new zip line scheduled to open in summer 2020 — just another way to experience the grandeur. In the winter, the park transforms into a snowy wonderland, so catch the green while you can.

County: Deschutes County
Nearby cities: Redmond, Bend, Sunriver, La Pine
Where to stay: Tetherow Resort, Mt. Bachelor Village Resort, Loge Bend

Cascade Lakes and Peaks

The area at the eastern slope of the Cascade Range is called the Land of Lakes for good reason: A full dozen crystal-clear lakes and reservoirs are a paradise for fly-fishers, hikers and road trippers along the Cascade Lakes Scenic Byway, which connects them all. Make it a true-blue summer lakeside experience with a dreamy van trip or family-friendly RV tour of Central Oregon. Soak up the high-desert sunshine and catch yourself a tasty dinner of rainbow or brook trout straight from the quiet and bountiful Little Lava Lake, at the headwaters of the Deschutes River.

If you’re looking to hike in the popular Mt. Jefferson, Mt. Washington or Three Sisters wilderness regions, know that 17 of the 79 trails require new Central Cascades Wilderness Permits. These must be purchased in advance for each outing between May 28, 2021 and Sept. 24, 2021. The permits are intended to limit the number of visitors to these sensitive areas, with fragile ecosystems that can be harmed by overuse. You can find dozens of equally spectacular hikes in the Central Cascades that do not require permits. Remember to stick to designated trails, pack out all trash and follow other steps to Take Care Out There wherever you go.

County: Deschutes County
Cities: Bend, Sunriver, La Pine
Where to stay: Elk Lake Resort, Lava Lake Campground, Best Western Premier Peppertree Inn at Bend


Sisters

Here in Sisters country, jeans and flannel are the perfect attire — or whatever suits your comfort. The charming Old West facades along downtown’s main street are just the gateway to your road-trip adventure. There’s rodeo culture, a handmade quilting culture and other art galleries to explore, a burgeoning craft-beer scene, and even a spa made from rejuvenating beer hops. Just outside of Sisters, find a number of family-friendly resorts that have hosted generations of visitors with everything from horseback riding and swimming to on-site dining, spas, golf, and miles of paved bike and walking trails.

County: Deschutes County
Cities: Sisters, Redmond, Terrebonne
Where to stay: Black Butte Ranch, FivePine Lodge, Best Western Ponderosa, The Suttle Lodge

Steins Pillar

It looks like a fist rising from the high-desert floor, a jaw-dropping geologic feature you can marvel at from up close or afar. Steins Pillar — the misspelled namesake of Central Oregon explorer Major Enoch Steen in the 1860s — is not a mysterious ancient man-made structure; it’s all natural. The 350-foot monolith is the largest remnant of the blast of tuff, or compacted volcanic ash, that filled the nearby Wildcat Caldera after its eruption 40 million years ago. See it up close by following the 2-mile (one-way) Steins Pillar Trail, which winds through dense forest and open meadows. The last 1.5-mile section of the trail is steep and challenging. For more geologic wonder and a longer hike, take the Twin Pillars Trail, 8.3 miles one way. The trail ends at 200-foot double pillars, with plenty of scenic vistas along the way, so pack a picnic and your Ten Essentials. Find more spots nearby to visit on your Prineville road trip.

County: Crook County
Cities: Prineville
Where to stay: Rustlers Inn, Brasada Ranch, Wildcat Campground

Lake Billy Chinook

You could spend days or even weeks having fun at Lake Billy Chinook, named for the Wasco Indian who joined the John C. Fremont expedition in 1843. Whether you want to swim, boat (try a party barge), paddle, hike, camp or fish — the most popular activity here — you’ll find 72 miles of shoreline with deep waters chock-full of smallmouth and largemouth bass, trout, kokanee, and more. At The Cove Palisades State Park, don’t miss the Tam-a-lau Trail (6.9 miles round-trip from the Deschutes Campground), which climbs to the top of a lava plateau with spectacular views of nearby peaks and canyons. Don’t miss the thousands-of-years-old petroglyph rock on display at the park between the Deschutes and Crooked river arms of the lake. About 13 miles west of the park entrance is another one-of-a-kind sight known as the Oregon Hoodoos — a bizarre landscape of stone spires that appear to be human-made but are actually the result of volcanic tuff that has eroded away to this crazy configuration.

County: Jefferson County
Cities: Madras, Culver, Camp Sherman
Where to stay: Inn at Cross Keys Station, Houseboat rental at Cove Palisades Resort & Marina, SCP Hotel Redmond

Shaniko

Drive 80 miles northeast of Bend and you’ll find the remnants of a historic wedding chapel, schoolhouse, hotel, City Hall and jail, and a host of vintage cars that look like they’ve been frozen in time. There’s also a former wool warehouse, as Shaniko — once touted as the “Wool Capital of the World” — is one of Oregon’s most beloved ghost towns. This former inland shipping town went bust after a rail line to Bend opened and two fires destroyed most of the business district. Today the Shaniko Historic District is not all lost — visitors can tour the sites (being respectful of the property) and visit the operating museum. Visit Shaniko, just off Highway 97, along a road trip back in time to the John Day Fossil Beds for even more of a Twilight Zone experience.

County: Wasco County
City: Shaniko
Where to stay: Wilson Ranches Retreat, Historic Balch Hotel, Trout Creek Campground

Deschutes River

The Deschutes River is the lifeblood of much of Central Oregon, winding through Bend, Warm Springs and Maupin for 174 miles on its way north to the Columbia River. Anglers love it for the world-class steelhead- and trout-fishing opportunities (pro tip: Book a guide to help you cast your first fly). And thrill-seekers of all ages love it for the easy-access rapids for rafting. Many trips originate in Maupin, a little town full of outdoor outfitters ready to get you geared up and on the water for a daylong or multiday trip. (If you go without outfitters, be sure to obtain a boater pass before floating.) Bend is also a busy jumping-off point for the Deschutes, with plenty of gear outfitters at your disposal. You can take a lazy float downriver by tube, challenge your balance with a stand-up paddleboard, take on the human-made rapids at Bend Whitewater Park via kayak or on a surfboard, or let out screams of delight aboard an easy rafting trip from Bend or Sunriver. You can even book your own private raft, and treat yourself afterward to a meal and a pint at one of Oregon’s top craft brewpubs.

Counties: Wasco County, Jefferson County, Deschutes County
Cities: Maupin, Bend
Where to stay: Imperial River Company, Tumalo State Park, Hampton Inn and Suites, Riverhouse on the Deschutes

White River Falls

As if it could get any more dramatic, you can, on a clear day, see the peak of Mt. Hood in the distance behind the two-tiered cascade of White River Falls, in the quiet rolling hills of the Tygh Valley — a quick shot south of The Dalles. Take in the beauty at White River Falls State Park, where you can set out on a rugged trek to the bottom of the canyon (.7-mile round-trip). Amidst the thunderous roar, breathe deep and pause to experience the full power of the plunge at the historic hydroelectric power plant, now abandoned. Fourteen miles north of Maupin, the waterfall is a worthy detour — the perfect place to enjoy a picnic lunch after a morning rafting or fishing trip on the Deschutes River.

County: Wasco County
Cities: Maupin
Where to stay: Historic Balch Hotel, Imperial River Company

Oregon Scenic Bikeways

There isn’t a single reason cyclists love Central Oregon — there are six! A half-dozen Scenic Bikeways encompass the region — easy road maps for two-wheeled warriors to experience the full grandeur of these awe-inspiring landscapes. In Wasco County, Sherar’s Falls Scenic Bikeway (33 miles) starts in Maupin and includes a climb onto the high plateau between the Deschutes and White rivers. Jefferson County’s Madras Mountain Views Scenic Bikeway (29 miles) winds through rolling farmland and along a canyon rim filled with the ultimate panorama of peaks, including Mt. Jefferson, Mt. Hood, Three-Fingered Jack, Mt. Washington, the Three Sisters, Broken Top and Mt. Bachelor. The chance to hike or climb at the big rock at the end, Smith Rock, is a sweet reward at the end of the Sisters to Smith Rock Scenic Bikeway (37 miles) in Deschutes County, with its rolling terrain suited for a broad range of riders. Twin Bridges Scenic Bikeway (36 miles) starts in Bend and features some of the best urban and farmland stops along the middle section of the Deschutes River. Experienced cyclists may set out on the McKenzie Pass Scenic Bikeway (38 miles), an extreme adventure that ends in Deschutes County, offers the stark contrasts of a lava-rock landscape and the forests both on the dry and wet sides of the Cascade mountain range. In Crook County, the Crooked River Canyon Scenic Bikeway (37 miles) meanders through vistas and deep forest with views of the Ochoco Mountains; cool off along the way with a waterfall, a lake and a river.

Counties: Deschutes, Jefferson, Crook, Wasco
Cities: Maupin, Madras, Terrebonne, Sisters, Bend, Prineville

Find your next adventure on Travel Oregon.

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Just Listed: Well Kept Home with Large Shop in La Pine

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A little gem on 1.16 Acres in popular Ponderosa Pines.

The 2 bed, 2 bath home is well cared for and features a large covered front porch area. The property borders public land, with direct access to forest service roads and trails from the back of the property. Ride your horse or ATV to the Deschutes River or Wickiup Reservoir right from the property. Store your gear and park your car in the detaches 24x24 heated garage/shop with additional storage area and greenhouse built on the back. Enjoy the mostly natural forest landscape as well as raised beds and fruit trees throughout the property.

Listed by Justin Peterson & Kennadi Dieter for West + Main Homes. Please contact Justin for current pricing + availability.

 
 
 

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