Expert predictions for the economy & housing market in 2022

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Though perhaps not as dramatic as 2020, 2021 was another tumultuous year. Fortunately, 2022 is on track to be — at the very least — somewhat more stable than the past two years. But we still aren’t likely to see the housing market and the broader economy immediately return to pre-pandemic norms.

Housing market behavior in 2021 could be described as a blessing and a curse.

  • Blessing: U.S. homeowners saw their home values skyrocket. Many people took advantage of near-record low mortgage rates to buy a home, refinance their loans or tap into their equity. Low rates helped homebuyers offset some of the extra costs associated with the dramatic price increases.
  • Curse: Home affordability issues grew even worse in 2021. Even with low rates, many households found they couldn’t compete in a market with consistently rising prices where bidding wars were the norm.

Meanwhile, the economy was equally hit or miss in 2021. More Americans returned to work — frequently negotiating higher wages — but high inflation offset many gains. Not only that, but the coronavirus has proven remarkably persistent, even as vaccination rates increase.

Will this year be any better? Here are the LendingTree predictions for the state of housing, jobs and the economy in 2022.

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Potential economic upsides in 2022

  • The housing market likely won’t crash. Because home prices have risen so much since the start of the pandemic, some may fear the housing market will crash like it did in 2008. But there isn’t much evidence to suggest this. Instead, the housing market fundamentals — like people’s ability to make their mortgage payments — look to remain strong in 2022.
  • Home price growth will moderate. Home prices aren’t likely to fall this year in most parts of the U.S., but that doesn’t mean they’re going to continue to skyrocket like in 2020 and 2021. While this won’t fully alleviate affordability issues, it should provide some relief for people who’ve constantly been priced out of their markets. Further, many who recently bought a home won’t need to panic about suddenly becoming underwater on their mortgages.
  • Supply chains should improve. As more people are vaccinated and return to work, delays in the acquisition, production and transportation of finished goods and raw materials should become less prevalent. This will help alleviate global supply chain issues and put downward pressure on the prices of various goods, including housing.
  • An even better job market is on the horizon. Though the national unemployment rate remains above pre-crisis levels and the labor force participation rate remains relatively low, the jobs market is expected to continue to improve this year. Unemployment should be down by the end of 2022, while labor force participation will likely be up.
  • Inflation may be less of an issue. Through improved supply chains, higher interest rates and reduced consumer spending, inflation should become more manageable as the year progresses. This is good news for households who’ve seen significant portions of their paychecks eaten away by inflation over recent months.

Potential economic downsides in 2022

  • Home prices will remain too high for many buyers. Though less drastic price growth will likely make buying a home easier for some, prices are still poised to remain high in 2022. Some who found themselves pushed out of the homebuying market during the pandemic may still struggle to afford a mortgage.
  • Supply chains won’t fully recover. Global supply chains — even if they’re getting better — have a ways to go before they start operating as smoothly as before the start of the pandemic. Consumers should expect certain goods to remain pricey and/or difficult to find in the coming months.
  • Interest rates will rise. To curb inflation and cool the economy, the Federal Reserve has indicated it will begin to hike rates this year. This isn’t all bad news, as lower inflation should make buying goods and services easier. But those looking to borrow money may need to contend with higher monthly payments than during the pandemic.
  • Personal and household savings will fall. During the COVID-19 crisis, one of the few positives was that personal saving rates increased. Unfortunately, excess savings have quickly diminished as the economy has gradually reopened, and savings may fall even further in the coming months due to inflation.
  • COVID-19 pandemic will still present economic recovery challenges. With the omicron variant leading to more restrictions and shutdowns across the globe, COVID-19 remains a major problem. Even with vaccines and boosters readily available to many in the U.S., the coronavirus will remain an obstacle that keeps full economic recovery at bay.

2022 housing and economic predictions

Average mortgage interest rates will rise to near 4% by the end of 2022

Interest rates might not get to 4% by the time 2023 rolls around, but they’re on track to rise into the high 3% range. Even if they hit 4%, rates will still be relatively low historically.

Nationally, average home price growth will be less than 5%

Home prices throughout much of the U.S. have risen dramatically since the start of the pandemic, but a greater supply of housing on the market and diminished consumer demand driven by higher rates should result in much less growth this year.

By 2022’s end, the unemployment rate will drop below 4%, while the labor force participation rate will rise to around 62%

From the early days of the pandemic through 2021, the unemployment rate dropped from 14.8% — the highest it’s ever been since tracking began in 1948 — to just above 4%. Over the same period, the labor force participation rate gradually ticked up from 60.2% to 61.7%. These trends will likely continue in 2022 as people return to the labor market and find new jobs.

Year-over-year GDP growth will be between 3% and 4%

Gross domestic product (GDP) has been on a steady upward trend since the second half of 2020, rising nearly 10% year over year to more than $23 trillion in the third quarter of 2021. As even more people return to work and both consumers and businesses continue to spend money throughout this year, GDP is poised to continue to grow.

The federal funds rate will increase between 0.5% and 0.75%

The effective federal funds rate has remained at 0.1% or lower since April 2020. But because of recent inflation concerns and the general economic recovery since, the Federal Reserve has signaled it will raise rates this year. Currently, we can expect anywhere from two to three hikes at 25 basis points each. If inflation proves to be particularly sticky in the coming months, these hikes may be more aggressive.

How consumers can set themselves up for success in 2022

Based on our predictions for the year ahead, most people don’t need to worry drastically about the sky falling. But there are things to consider or keep an eye on as the year progresses.

  • If you’re thinking about refinancing and haven’t done it yet, strongly consider it now. With mortgage rates already considerably higher than their pandemic lows, those looking to refinance their mortgage aren’t likely to see as much savings as they would have in most of 2020 and 2021. Nonetheless, rates remain below where they were before the pandemic, so homeowners have time to refinance to a relatively low rate. But that window of opportunity is rapidly shutting.
  • Don’t be afraid of renting instead of buying. Even if more new construction and higher rates dampen home price growth this year, prices will remain unaffordable to many would-be buyers. That said, renting will likely remain considerably cheaper than buying and could be a good option for those priced out of their local markets.
  • Be prepared for change. It’s no secret the economy has been incredibly volatile since the start of the pandemic. While 2022 is on track to be somewhat more stable than the past two years, there’s no guarantee it will be. People should be prepared to quickly react to sudden changes in the housing or jobs market. This could mean trying to set aside more money for an emergency or being ready to quickly snatch up a good deal on a home that just hit the market.

This article originally appeared on LendingTree.com and was syndicated by MediaFeed.org.

 

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The best county for retirees in every state

 

Retirement may be the time to move closer to family or put down new roots in a warm climate. Helping make that decision a bit easier is an index of the best places to retire in each of the 50 states, which was created by 24/7 Wall St.

Suggesting locales from Alaska’s majestic Kenai Peninsula to Arizona’s desert Pima County, the index weighed health costs, taxes and housing expenses, all significant for retirees likely to be living on fixed and reduced incomes.

“Because of the medical, social, and financial consequences of entering old age, life can change dramatically in retirement,” said 24/7 Wall St.

Among the best spots were Arkansas’ Baxter County in the Ozark Mountains; Chaffee County in the Colorado Rockies; and Park County, Wyoming, home to Yellowstone National Park.

Lovers of sun and sand could find a haven on the beaches of Delaware’s Sussex County, Florida’s Sarasota County or Beaufort County, South Carolina, and fishing fans might opt for Louisiana’s Jefferson Parish on the Gulf of Mexico or the lakes and ponds of Cumberland County, Maine.

The index took into consideration health factors such as the number of medical professionals per capita and access to exercise opportunities. Economic factors included median home values, the monthly cost of living and state and local taxes.

It only considered counties where the 65-and-over population grew at least as fast as the rest of the nation and was larger than the national average.

Demand for retirement locales will only grow bigger. The U.S. Census Bureau says by 2035, the number of adults age 65 and over will hit 78 million and outnumber children under age 18.

 

Christoph Strässler / Flickr

 

When it comes to retirement planning, our thoughts usually jump straight to finances. Do I have enough saved in my 401k? How will I manage healthcare costs? When should I start collecting Social Security?

All valid concerns, for sure. But Eric Thurman, author of Thrive in Retirement: Simple Secrets for Being Happy for the Rest of Your Life, says money is just one key factor to consider as you transition to this new life stage.

“Many people expect to live ‘happily ever after’ in retirement but haven’t thought much about how that will occur,” he says. He lists these areas as focus points for a happy retirement.

 

monkeybusinessimages/istockphoto

 

Thurman points to two key factors for keeping your mind healthy in retirement — cognitive strength and mental health. He says there are lots of options for maintaining a strong brain as you age, and he doesn’t think crossword puzzles and card games are enough. “You need to stretch. You need to be learning a foreign language or a musical instrument — something that’s forcing you to develop new skills,” he says.

Appreciating or creating art might help too. One study found that artistic activities boosted cognitive function in older people. And another study found that people predisposed to Alzheimer’s disease who were intellectually active delayed the start of the disease by nine years.

Your mental health needs attention, too. Thurman says that the unresolved hurts and losses that can surface in retirement may need attention. “If you’re raising children and busy with your career you can get distracted all of the time. Once you’ve got a lot of free time you can ruminate,” he says.

Counseling, support groups, or grief recovery programs could help. “Don’t let your mind be captive to old wounds that keep coming up,” he says.

 

simonapilolla/istockphoto

 

Your retirement years won’t be nearly as happy if you’re frail and unhealthy.Thurman thinks some people stop taking care of their health as they age because they may not realize how much longer they are likely to live. By 2050, a projected 19 million people in the US will be age 85 or older.

He encourages people to think about themselves in the future: “If you get to be 90, what kind of a 90-year-old do you want to be? Do you want to be stuck in a chair, or need help or a walker to get around? Or do you want to be able to do anything you want to do?”

You don’t have to train for a marathon, or eliminate cookies and potato chips. Just boosting the intensity of what you already do and adding more nutritious foods to your diet can help you stay fit and healthy.

 

interstid/istockphoto

 

“I have a friend who is a psychiatrist who says that the number one health issue in the U.S. and the world is loneliness,” Thurman says. “We can have hundreds of followers on Instagram or Facebook and not have that personal human contact necessary for wellbeing. We aren’t good about that.”

He says employment patterns in the last generation or two have increased isolation, since it’s more common for people to relocate for work and live further away from their families.

According to the National Institute on Aging, social isolation and loneliness are linked with high blood pressure, heart disease, obesity, reduced immune system function, anxiety, depression, cognitive decline, and Alzheimer’s disease.

 

jacoblund/istockphoto

 

Population: 203,360

65 and over %: 19.0% (15th of 67 counties)

Est. monthly expenses for family of 2: $4,343.67 (2nd out of 67 counties)

Median home value: $182,000

 

Chris Pruitt / Flickr

 

Population: 57,961

65 and over %: 14.8% (5th of 29 borough)

Est. monthly expenses for family of 2: $5,341.27 (14th out of 29 counties)

Median home value: $234,600

 

Christoph Strässler / Flickr

 

Population: 1,007,257

65 and over %: 18.1% (7th of 15 counties)

Est. monthly expenses for family of 2: $3,876.65 (14th out of 15 counties)

Median home value: $166,300

 

Gillfoto / Flickr

 

Population: 41,093

65 and over %: 30.5% (1st of 75 counties)

Est. monthly expenses for family of 2: $3,478.55 (39th out of 75 counties)

Median home value: $124,400

 

Sweetmoose6 at en.wikipedia / Public domain

 

Population: 18,724

65 and over %: 25.8% (4th of 58 counties)

Est. monthly expenses for family of 2: $4,201.70 (32nd out of 58 counties)

Median home value: $228,900

 

Ken Lund / Flickr

 

Population: 18,818

65 and over %: 24.1% (10th of 64 counties)

Est. monthly expenses for family of 2: $4,197.89 (37th out of 64 counties)

Median home value: $313,200

 

Jeffrey Beall / Flickr

 

Population: 897,417

65 and over %: 16.2% (4th of 8 counties)

Est. monthly expenses for family of 2: $4,257.11 (8th out of 8 counties)

Median home value: $235,300

 

almdesign/pixabay

 

Population: 215,551

65 and over %: 25.2% (1st of 3 counties)

Est. monthly expenses for family of 2: $4,249.98 (3rd out of 3 counties)

Median home value: $242,900

 

Nicholas A. Tonelli / Flickr

 

Population: 404,839

65 and over %: 34.8% (4th of 67 counties)

Est. monthly expenses for family of 2: $4,156.50 (19th out of 67 counties)

Median home value: $215,300

 

Ebyabe / Flickr

 

Population: 11,173

65 and over %: 33.6% (1st of 159 counties)

Est. monthly expenses for family of 2: $4,103.24 (49th out of 159 counties)

Median home value: $197,900

 

John Trainor / Flickr

 

Population: 196,325

65 and over %: 18.5% (1st of 5 counties)

Est. monthly expenses for family of 2: $4,848.14 (5th out of 5 counties)

Median home value: $316,000

 

W Nowicki / Flickr

 

Population: 10,104

65 and over %: 24.6% (6th of 44 counties)

Est. monthly expenses for family of 2: $3,917.45 (11th out of 44 counties)

Median home value: $256,000

 

Charles Knowles from Meridian Idaho, USA / Wikipedia

 

Population: 198,134

65 and over %: 16.1% (80th of 102 counties)

Est. monthly expenses for family of 2: $3,979.79 (66th out of 102 counties)

Median home value: $136,100

 

Larry D. Moore / Flickr

 

Population: 61,581

65 and over %: 16.1% (57th of 92 counties)

Est. monthly expenses for family of 2: $3,990.13 (6th out of 92 counties)

Median home value: $158,100

 

Nyttend / Public domain

 

Population: 20,575

65 and over %: 18.7% (61st of 99 counties)

Est. monthly expenses for family of 2: $4,143.31 (8th out of 99 counties)

Median home value: $161,500

 

Karen Noecker / Flickr

 

Population: 34,683

65 and over %: 18.4% (63rd of 105 counties)

Est. monthly expenses for family of 2: $3,864.68 (72nd out of 105 counties)

Median home value: $120,000

 

Steve Meirowsky / Flickr

 

Population: 99,258

65 and over %: 16.2% (73rd of 120 counties)

Est. monthly expenses for family of 2: $3,649.43 (57th out of 120 counties)

Median home value: $123,200

 

W.marsh / Flickr

 

Population: 437,038

65 and over %: 15.6% (25th of 64 parishes)

Est. monthly expenses for family of 2: $4,036.27 (19th out of 64 counties)

Median home value: $176,000

 

dbking / Flickr

 

Population: 289,173

65 and over %: 16.8% (15th of 16 counties)

Est. monthly expenses for family of 2: $4,721.10 (1st out of 16 counties)

Median home value: $259,400

 

Ken Lund / Flickr

 

Population: 51,559

65 and over %: 26.2% (2nd of 24 counties)

Est. monthly expenses for family of 2: $4,171.72 (16th out of 24 counties)

Median home value: $252,100

 

Famartin / Flickr

 

Population: 161,197

65 and over %: 15.3% (10th of 14 counties)

Est. monthly expenses for family of 2: $4,639.86 (9th out of 14 counties)

Median home value: $272,700

 

Massachusetts Office Of Travel & Tourism / Flickr

 

Population: 32,978

65 and over %: 20.2% (33rd of 83 counties)

Est. monthly expenses for family of 2: $3,849.82 (29th out of 83 counties)

Median home value: $171,100

 

Royalbroil / Flickr

 

Population: 5,270

65 and over %: 26.1% (2nd of 87 counties)

Est. monthly expenses for family of 2: $4,284.08 (23rd out of 87 counties)

Median home value: $241,400

 

Norstrem / Flickr

 

Population: 78,221

65 and over %: 15.7% (45th of 82 counties)

Est. monthly expenses for family of 2: $3,620.78 (65th out of 82 counties)

Median home value: $88,500

 

Dudemanfellabra / Flickr

 

Population: 999,539

65 and over %: 16.9% (79th of 115 counties)

Est. monthly expenses for family of 2: $3,897.75 (74th out of 115 counties)

Median home value: $181,100

 

Nicolas Henderson / Flickr

 

Population: 66,290

65 and over %: 16.6% (44th of 56 counties)

Est. monthly expenses for family of 2: $4,290.89 (9th out of 56 counties)

Median home value: $220,600

 

Robstutz / Flickr

 

Population: 4,318

65 and over %: 26.7% (5th of 93 counties)

Est. monthly expenses for family of 2: $4,311.88 (41st out of 93 counties)

Median home value: $62,300

 

Ammodramus / Flickr

 

Population: 47,632

65 and over %: 25.4% (4th of 17 counties)

Est. monthly expenses for family of 2: $4,277.85 (9th out of 17 counties)

Median home value: $311,400

 

Patrick Nouhailler / Flickr

 

Population: 89,280

65 and over %: 18.8% (5th of 10 counties)

Est. monthly expenses for family of 2: $4,092.95 (6th out of 10 counties)

Median home value: $215,600

 

Jet Lowe / Public domain

 

Population: 125,717

65 and over %: 16.5% (4th of 21 counties)

Est. monthly expenses for family of 2: $5,346.02 (1st out of 21 counties)

Median home value: $393,800

 

JERRYE and ROY KLOTZ MD / Flickr

 

Population: 18,031

65 and over %: 17.2% (20th of 33 counties)

Est. monthly expenses for family of 2: $3,934.80 (4th out of 33 counties)

Median home value: $285,300

 

Aaron Zhu / Flickr

 

Population: 64,701

65 and over %: 20.3% (5th of 62 counties)

Est. monthly expenses for family of 2: $4,330.03 (23rd out of 62 counties)

Median home value: $192,800

 

Mobilus In Mobili / Flickr

 

Population: 252,268

65 and over %: 18.4% (49th of 100 counties)

Est. monthly expenses for family of 2: $4,329.91 (37th out of 100 counties)

Median home value: $209,800

 

Warren LeMay / Flickr

 

Population: 11,574

65 and over %: 18.8% (33rd of 53 counties)

Est. monthly expenses for family of 2: $3,703.54 (51st out of 53 counties)

Median home value: $130,400

 

Andrew Filer / Flickr

 

Population: 1,257,401

65 and over %: 17.0% (43rd of 88 counties)

Est. monthly expenses for family of 2: $3,458.20 (78th out of 88 counties)

Median home value: $123,900

 

Pixabay

 

Population: 62,421

65 and over %: 15.2% (60th of 77 counties)

Est. monthly expenses for family of 2: $3,882.56 (64th out of 77 counties)

Median home value: $104,000

 

Kiddo27 / Flickr

 

Population: 363,471

65 and over %: 17.7% (23rd of 36 counties)

Est. monthly expenses for family of 2: $4,034.99 (29th out of 36 counties)

Median home value: $232,800

 

Visitor7 / Flickr

 

Population: 18,302

65 and over %: 20.1% (20th of 67 counties)

Est. monthly expenses for family of 2: $4,378.06 (16th out of 67 counties)

Median home value: $173,800

 

Jakec / Flickr

 

Population: 49,028

65 and over %: 19.1% (2nd of 5 counties)

Est. monthly expenses for family of 2: $4,451.59 (2nd out of 5 counties)

Median home value: $341,300

 

Angusdavis/Public Domain

 

Population: 179,316

65 and over %: 24.9% (3rd of 46 counties)

Est. monthly expenses for family of 2: $4,702.03 (1st out of 46 counties)

Median home value: $283,800

 

Ken Lund / Flickr

 

Population: 17,572

65 and over %: 15.6% (50th of 66 counties)

Est. monthly expenses for family of 2: $3,814.69 (62nd out of 66 counties)

Median home value: $173,400

 

Jeffrey Beall / Flickr

 

Population: 126,437

65 and over %: 17.1% (62nd of 95 counties)

Est. monthly expenses for family of 2: $3,609.55 (82nd out of 95 counties)

Median home value: $152,800

 

Brian Stansberry / Flickr

 

Population: 25,939

65 and over %: 28.7% (8th of 254 counties)

Est. monthly expenses for family of 2: $3,750.25 (125th out of 254 counties)

Median home value: $269,900

 

Larry D. Moore / Flickr

 

Population: 155,577

65 and over %: 19.9% (3rd of 29 counties)

Est. monthly expenses for family of 2: $4,040.76 (14th out of 29 counties)

Median home value: $240,300

 

Tony Webster / Flickr

 

Population: 36,054

65 and over %: 21.4% (2nd of 14 counties)

Est. monthly expenses for family of 2: $4,641.36 (10th out of 14 counties)

Median home value: $208,600

 

Daniel Case / Flickr

 

Population: 27,516

65 and over %: 15.2% (97th of 133 counties)

Est. monthly expenses for family of 2: $4,005.88 (73rd out of 133 counties)

Median home value: $226,200

 

AgnosticPreachersKid / Flickr

 

Population: 75,138

65 and over %: 17.6% (22nd of 39 counties)

Est. monthly expenses for family of 2: $3,839.28 (16th out of 39 counties)

Median home value: $256,400

 

Jon Roanhaus / Flickr

 

Population: 42,906

65 and over %: 20.2% (18th of 55 counties)

Est. monthly expenses for family of 2: $3,779.52 (54th out of 55 counties)

Median home value: $114,800

 

Jon Dawson / Flickr

 

Population: 73,427

65 and over %: 19.2% (28th of 72 counties)

Est. monthly expenses for family of 2: $3,754.34 (51st out of 72 counties)

Median home value: $127,700

 

TheCatalyst31 / CC0

 

Population: 29,276

65 and over %: 20.4% (5th of 23 counties)

Est. monthly expenses for family of 2: $4,269.06 (11th out of 23 counties)

Median home value: $236,200

 

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This article originally appeared on Considerable.com and was syndicated by MediaFeed.org.

 

halfuur / Flickr

 

Featured Image Credit: bodnarchuk / istockphoto.

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