The historic run on home prices is set to wind down in 2022

Instead of creating a housing bust, the pandemic helped spur one of the most competitive—and tight—housing markets in recorded U.S. history. Between August 2020 and August 2021, home prices soared a record 19.9%—dwarfing the previous biggest 12-month price jump (14.1%), which came in the period leading up to the 2008 meltdown.

But that level of price growth is expected to come down. This fall, the housing market finally started to slow a bit, as more inventory hit the market and fewer buyers engaged in bidding wars. While the industry benchmark S&P CoreLogic Case-Shiller Home Price Indices have yet to publish readings for September and October, industry insiders told Fortune they are already starting to see price growth decelerate.

“We’ve fallen into a more boring housing market compared to what we’ve seen since the start of the pandemic,” Ali Wolf, chief economist at Zonda, told Fortune. “Despite the pervasiveness of sticker shock, some consumers are choosing to charge forward in today’s less feverish market to secure a home and lock in a historically low (and rising) mortgage rate.”

The housing market is still moving upward, albeit at a slow pace. That slowing, or so-called normalization, is expected to continue into next year: Every 2022 forecast model Fortune has reviewed anticipates that price growth will slow down next year. The projected growth range among these forecasts is all over the place, however. Fannie Mae sees prices rising 7.9% in 2022. Zillow Research is more bullish, projecting 13.6% price growth in the next 12 months. And Ed Pinto, director of the American Enterprise Institute’s Housing Center, told Fortune’s Shawn Tully that prices could still rise in the high single-digits to low double-digits.

The most bearish 2022 outlook comes from CoreLogic, a Fortune 1000 real estate data firm. Earlier this week, the company went so far as to downgrade its price growth estimate for the coming 12 months, going from 2.2% to 1.9%. If that rate of price growth comes to fruition, it would mark the lowest price jump since 2012.

The reason? Well, there’s a lot going on. For starters, stubbornly high inflation has increased the odds that the Federal Reserve will raise interest rates, and thus mortgage rates, sooner than later. The average 30-year fixed mortgage rate, which is currently 3.09%, could rise near or above 4% next year. Of course, higher mortgage rates put direct downward pressure on prices. Then there’s the combination of the return of seasonality—after being absent during the abnormal 2020 cycle—and the end of COVID-19 mortgage forbearance protections, which have helped to send inventory rising again.

There’s more. If employers actually bring staffers back into the office, that could cut down on homebuying in second-home markets and exurbs. As CoreLogic CEO Frank Martell put it in the company’s latest outlook report: “As we head into 2022, we expect some moderation in the current pattern of flight away from urban cores as the pandemic wanes.”

But sellers and buyers alike might be wise to take all of these forecasts with a grain of salt. After all, when the pandemic struck last year, CoreLogic and Zillow forecasted that housing prices would fall through early 2021. The opposite occurred: The economy shed the COVID-19 recession by May 2020, and the housing market was off to the races. The bombshell that dropped on Tuesday also might undermine some people’s confidence. While announcing this week that it was shutting down its unprofitable home-flipping business, Zillow CEO Rich Barton admitted that his firm isn’t very good at forecasting prices: “We’ve determined the unpredictability in forecasting home prices far exceeds what we anticipated.” 

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