The average home value in the United States increased by nearly 20% in 2021, and many experts think we'll see things cool off as we head into 2022. But I'm not so sure. In this Fool Live clip, recorded on Dec. 13, I explain why I think we could see another double-digit percentage gain in the housing market in 2022.
10 stocks we like better than Walmart
When our award-winning analyst team has an investing tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Walmart wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Stock Advisor returns as of 6/15/21
Matt Frankel: The housing market will have another double-digit gain in 2022.
Jason Moser: Whoa, really?
Frankel: That's one I've gotten the most push-back on so far surprisingly to me.
Moser: Interesting.
Frankel: It's like don't bet against the trend. In the third quarter, U.S. home prices increased by 18.5% year-over-year just throughout the nation. That's the average. So, some markets were in the 20s and 30s. Now, that's a high increase. There are things driving it though like lower mortgage rates and unfortunately high demand and low inventory of houses. Those things might sound temporary. But I think there are some permanent catalysts where they keep prices going higher.
For example, they recently announced that the conforming mortgage limit is going to rise by about $100,000 next year, which makes it easier for buyers to finance homes that have appreciated in value. The FHA has announced a similar increase to the FHA lending limits. Supply is limiting home builders' ability to make new homes right now. Supply chain and labor disruptions rather. But we're seeing massive backlogs in the home builders. One of the ones that I follow Dream Finders Homes (DFH -3.59%) that I've talked about on this show, they announced their highest backlog ever just recently. Other home builders are seeing the same. I just feel like there's so much pent-up demand that it's going to keep the price increases going for at least another year.
Moser: Yeah. It does feel like the attitude on the ground out there today is still very high demand. We had a little home down on the river here that we just decided to sell. We don't get to use it that often and so we put it on the market, and I think within three days, just immediately three offers all well above what we were asking. The demand is just out there. It's the middle of December. So, it feels like that is going to bleed into 2022 actually like that. I like that call too.
