Home sales, price growth to slow in 2022 after rapid 2021 rises

Virginia home sales in 2022 will be down by about a tenth of a percent compared to 2021 sales, according to a forecast report released Friday by Virginia Realtors.

In 2021, the report projects a total of about 148,600 home sales in Virginia, up 6.2% from 2020.

“While home sales activity in 2021 will surpass even the strong performance of 2020, next year will be a little different, due primarily to rising affordability challenges, continued low inventory and a slight uptick in mortgage rates,” Virginia Realtors Chief Economist Lisa Sturtevant said in a statement.

The association also predicts that the rate of price growth will slow in 2022 as demand softens and inventory expands. The 2021 median home price in Virginia is projected to be a 9.2% increase from 2020 prices, and the 2022 prices are expected to rise about 4.1%.

About 37,000 new housing units will be built in Virginia in 2021, up 10.3% compared to 2020, according to the forecast. Construction will stabilize in 2022, slowing to a 0.5% rise.

The 30-year fixed-rate mortgage rate will be 3.1% in December 2021 and will rise to 4% by the end of 2022, according to the association’s forecast.

Virginia Realtors, formerly the Virginia Association of Realtors, is a trade association representing 36,000 realtors in the residential and commercial real estate business.