Fairweather forecasts  that balance will return to the market next year, but not after a scramble to snatch up homes with buyers taking advantage of low rates who will deplete the supply in the first half of 2002. In the second half, new construction will boost sales slightly, as there will be 1% more sales than in 2021, and by the close of 2022, home price growth will slow to 3%.
Fairweather's 10 predictions for 2022 are as follows:
Prediction #1: Mortgage rates will rise and prices will drop
Freddie Mac reported rates were back up this week , coming in at 3.10%, a 0.12% rise over the previous week. Redfin anticipates the 30-year fixed-rate-mortgage (FRM) averaging 3.6% by the end of 2022, resulting in an average of $100 more per month in mortgage payments for a median-priced home.
Prediction #2: New listings will hit decade-long high, yet inventory issues will linger
Redfin predicts that in 2022, new listings will surpass the 2018 high of 7.6 million homes, setting new records traced back to at least 2012. As the market becomes more balanced, homeowners will find it less daunting to list their home, while seeking another.
Prediction #3: Rents will continue to ascend and rise by 7%
CoreLogic’s latest Single-Family Rent Index (SFRI)  found that U.S. single-family rent growth increased 10.2% in September 2021, the fastest year-over-year increase in over 16 years. That increase in rent was nearly four times the increase seen in September 2020 (2.6%) on a year-over-year basis, and is running well above pre-pandemic levels when compared with 2019.
Redfin forecasts that rents will rise 7% by the end of 2022, more than double the predicted year-over-year growth in home prices of 3%.
The demand for rentals will be tied to several factors, including those exiting forbearance who choose to sell their homes and opt to rent; and the ability to work remotely and rent until a stable residence is found.
Prediction #4: Homebuyers will relocate to more affordable cities
While the pandemic saw home prices rise in Sun Belt cities like Austin, Texas; Atlanta; and Phoenix, Redfin feels those seeking more affordable options will seek out affordable northern cities like Columbus, Ohio; Harrisburg, Pennsylvania; and Indianapolis. All happen to be capital cities with highly educated residents where the median home price is still less than $250,000.
Prediction #5: People will relocate to places that align with their politics
The proliferation of remote working situations has allowed people to have more control over where they settle down. Redfin predicts that more will consider school districts that align with their preferences regarding mask mandates, critical race theory, and other controversial issues.
Prediction #6: There will be a renewed interest in condos
As affordability issues continue to haunt prospective buyers, more and more will open to buying a condo or townhome for a fraction of the price of a single-family home. This trend differs from the outset of the pandemic when homebuyers, due to lockdowns and stay-in-place mandates, sought larger homes with spacious yards, forcing single-family homes to rise 27% from the start of the pandemic, while condo home prices only rose by 14%.
Prediction #7: Climate risks will increasingly factor into home buyer decisions
Redfin has found that an increasing number of inquiries have come in from potential buyers curious about an area’s flood and fire risk, and how those tangibles factor into insurance costs.
Prediction #8: Housing policy will become central to political battles about climate change
As natural disasters due to climate change become increasingly frequent, political debates will emerge about who should pay for the damage and what the government should do to minimize future damage.
Earlier this week, the U.S. Department of Housing and Urban Development (HUD) released its Climate Action Plan . The Plan is part of the Biden Administration’s “whole of government” approach to confronting the climate crisis on multiple fronts, through a comprehensive strategy to reduce energy use and carbon footprint in the coming years.
Part of HUD’s Plan is a review of current policies to ensure that they have a green-first perspective, while continuing dialogue with local agencies and non-governmental organizations to “identify available resources and appropriate solutions to eliminate hazards and improve residents’ overall health.”
Democratic members of the House Financial Services Committee—led by Rep. Maxine Waters, Chair of the House Financial Services Committee, recently pressed President Joseph R. Biden, House Speaker Nancy Pelosi, and Senate Majority Leader Charles Schumer to include the Committee-passed housing provisions  in the Build Back Better Act.
Prediction #9: iBuyers focus on perfecting a niche service instead of market domination
A recent Zillow analysis  found that iBuyers were poised to sell a record number of homes in Q3 after setting an all-time high in Q2. The study found that the market share for iBuyers reached 1% of all U.S. home purchases in Q2 for the first time, as homeowners increasingly used these services to sell more than 15,000 homes nationwide.
Redfin predicts that iBuyers will focus their efforts on providing premium service that is truly needed for a portion of home sellers. Sellers who want to move quickly to take advantage of a new job opportunity, those who may not want to deal with the hassle of open houses and home staging, and sellers who want the cash from selling their current home to buy their next all stand to benefit from selling to an iBuyer.
Prediction #10: The DOJ will more closely scrutinize real estate agent compensation
In 2022 the U.S. Department of Justice (DOJ) will crack down on how real estate agents are paid, and it is possible that buyers will eventually have to pay upfront for their agent. If buyers must pay upfront, Redfin feels that many of them will likely pay more attention to the services their agent offers and grow more cost-conscious.
“At the very minimum the Department of Justice wants more transparency around how fees for homebuyers and sellers are set,” said NYU Law Professor Scott Hemphill  in a Redfin release . “The subpoena from the DOJ suggests that the way that home sellers determine how much the buyer’s agent is paid could be in jeopardy. I believe the real estate industry is getting more scrutiny now because it’s clear that technology has made it so homebuyers and sellers can do much more of their own research, and yet fees have not come down.”