For the past two years, the housing boom has recorded rising sales prices. When home prices reach astronomical levels, some experts have warned of a collapse that could rival the Great Recession.

The majority of experts do not share this view.

Lawrence Yun, chief economist at the NAR, says we should not be afraid. The same is true for home sellers and home buyers.

Here are five insights that show that a solid 2022 is ahead.
Current home price trends are certainly similar to what happened before the Great Depression, but Yun said subprime mortgages, low mortgage rates, and restrictions on strong demand from qualified buyers would stop the collapse.

Last time, the price-to-income line was so high that house prices collapsed, he said. Things are very different now. There are no high-risk subprime mortgages and no oversupply.

Tight inventory and higher house prices have hit buyers across the country, even in markets that have historically been considered more affordable.
Mortgage rates have risen slightly over the past few months.

Yun said further increases are underway as the Federal Reserve could raise mortgage rates by up to 3.7%. It’s well above the bottoms seen in 2020, but he said most buyers would still be able to proceed.

Looking at some numbers about rising prices for income ratio, if mortgage rates take into account , mortgage payments for income are still very manageable.
Financially safe buyers can skillfully navigate home prices and mortgage growth rates, but first-time buyers tend to have low incomes and struggle to save significant down payments. Therefore, they have a hard time.

The Federal Reserve is unlikely to give them a break by lowering mortgage rates, but lawmakers are working on ways to assist on the down payment.
At the end of the mortgage grace period, 500,000 homeowners will be faced with the reality of losing a home.

However, unlike 2007 and 2008 (they have equity), these homeowners have the option of selling their home rather than entering foreclosure.

This situation is likely to lead to increased inventories this spring. In addition to homeowners avoiding foreclosures, Yun said another segment of homeowners will sell their homes for other circumstances, such as the loss of a loved one due to COVID.

There are often changes and family situations that require the sale of a home. This can also lead to some additional inventory.

Increased inventories would help cool home price increases.
Inflation is very high, prices are rising everywhere.

Despite inflation, Yun said real estate is still a safe bet.

Real estate can be a good hedge against inflation because property values over time tend to stay ahead on a steady upward curve.

Real estate investments can also provide potential recurring income for investors and can keep pace or exceed inflation in terms of appreciation.