• Zillow expects annual home value growth to continue to accelerate through the spring, peaking at 21.6% in May before gradually slowing to 17.3% by January 2023.
• More than 335,000 existing homes are expected to have sold in January, a seasonally adjusted annual rate of 6.11 million.

Annual home value growth is likely to continue accelerating through the spring before peaking at 21.6% in May, before gradually slowing through January 2023. More than 6.2 million total existing homes are expected to sell in 2022.

Monthly home value growth is also expected to continue accelerating in coming months, rising to 1.7% in February and growing to 1.9% in April before slowing somewhat. By the end of January 2023, the typical U.S. home is expected to be worth more than $380,000. The robust long-term outlook is driven by our expectations for tight market conditions to persist, with demand for housing exceeding the supply of available homes. 

The seasonally adjusted annual rate of existing home sales in January is expected to total more than 6.11 million, down 1.1% from December and 8.1% from January 2021 (January 2022 existing home sales data are scheduled to be released by the National Association of Realtors on Feb. 18, 2022). Existing sales volume (SAAR) is expected to grow throughout the spring home shopping season, before falling very slightly beginning in July. Overall, Zillow expects more than 6.2 million existing homes to sell in 2022, up 1.6% from an already strong 2021.

However, downside risks to our forecast remain. Elevated inflation heightens the risk of near-term monetary policy tightening, which would result in higher mortgage rates and weigh on housing demand.