The housing market will enter a “new normal” in 2022 due to unprecedented coronavirus pandemic-induced changes to the housing market and subsequent policy responses, according to the latest Fannie Mae forecast.

The mortgage giant forecasted that inflation will remain high and that home price growth will continue, adding that it’s unclear what structural shifts in the economic and housing markets over the past two years will be permanent, according to its Economic and Strategic Research (ESR) Group’s January 2022 commentary.

The group says that home buyers could struggle with affordability challenges, and predicts home prices to jump 7.6% this year. Although that figure is higher than average, it’s still down from the 17.3% home price appreciation that had been expected for 2021. This comes as high demand and home inventory shortages raise prices for home sales. And rising lumber prices and labor shortages also forced prices higher.

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Source : Fox Business