It’s hard to believe we’re already approaching 2022, yet here we are. The new year has a lot of people planning for what’s ahead financially. As part of that, you could be wondering if you’re going to have a chance to buy a home next year after 2021 left few opportunities.

So what are the predictions looking like for the coming year?

Cities Could Surge Again

People may become comfortable with big cities again, following the pandemic’s start, where many people relocated to the suburbs and less expensive states. That means some areas in the Northeast, Southeast and the West Coast could see an increase in real estate action.

Of course, we don’t know how the pandemic will continue to unfold and whether that’s going to play a role in how willing or reluctant people are to make a move back to cities. There are certainly headwinds still being felt in large metro areas that could keep buyers away.

The Housing Boom May Lose Some Steam

Between August 2020 and August 2021, home price appreciation was 19.9%. That represented a 12-month record.

However, some indicators indicate the boom is losing some steam, although analysts are eager to point out they don’t necessarily see a crash in the near future.

Instead, it looks like there’s some seasonality in the cooldown, which is typical during the holidays. It also seems that homebuyers are finally starting to take a pause against the surging prices in the real estate market.

For example, in October, just over 60% of sales involved a bidding war, down from an all-time high of 74.5% in April.

There’s also a pretty high likelihood the Federal Reserve will raise rates as a way of slowing inflation, and with a rise in mortgage rates, some buyers will be altogether priced out.

Differing Models

Zillow and Goldman Sachs are predicting home prices will go up significantly between October 2021 and October 2022. Zillow predicts a rise of 13.6%. Goldman Sachs is forecasting an increase of 16%.

Both cite the ongoing supply-demand imbalance. They describe the housing shortage as being potentially the longest of all the shortages affecting the economy currently.

Neither Zillow nor Goldman Sachs sees the first-time millennial homebuyer wave easing either. The five largest millennial birth years, which are between 1989 and 1993 are hitting the first-time home-buying age of around 30. Some analysts believe there won’t be enough homes for all of the future demand.

Some forecast models, however, see things looking a bit different next year.

For example, Fannie Mae is predicting U.S. home price growth of 7.9%. Freddie Mac is estimating 7%, which is higher than the historical norm but nothing like we’ve been seeing.

There are some variances in models as analysts try to predict what will happen with mortgage rates and how hard employers push to get people back in the office.

The Mortgage Bankers Association, an industry trade group, sees the median price of existing homes decreasing by 2.5% between the fourth quarter of this year and the fourth quarter of next. The organization is forecasting the average 30-year fixed mortgage rate will rise to 4% by the end of 2022. That would be an additional $90,000 added to the cost of a $500,000 fixed-rate mortgage over 30 years.

Even if that predicted pricing drop were to occur, it still wouldn’t be a crash. U.S. home prices, even if the Mortgage Bankers Association had the correct forecast, would still be up over 20% from levels before the pandemic.

We don’t know what the coming year will look like, but most industry experts feel prices will remain somewhat high, although dependent on mortgage rates.