November 2nd 2021

Ed Pinto makes the among the most accurate predictions of all the real estate world’s data-crunchers on where housing prices are heading. Pinto, director of the American Enterprise Institute’s Housing Center and former chief credit officer at Fannie Mae, is constantly assembling proprietary data on newly issued mortgages that provide a road map for the months ahead. And what's Pinto seeing now? He's convinced the naysayers are wrong and that the gangbusters, double-digit run for home prices will keep rolling well into 2022. “Over the past three or four months we’ve heard lots of hand-wringing about a buyers’ strike, talk that people aren’t buying as many homes as before,” he said. “That’s a fake narrative.”

Home prices are still soaring

Pinto notes that indeed, the number of prospective sales has declined from the peak in June. But that downshift doesn’t mean the market’s cooling. “That’s when we see always see peak purchase volumes as measured by number of new home loans.” The ranks of buyers that secure financing, or what’s known as “rate locks,” follow a seasonal pattern of declining gradually from the summer through the low point at year-end. “What matters is that purchase volumes are extremely high for this time of year,” says Pinto. To bypass the distortions caused by the pandemic, Pinto compares the buying activity for each week in 2021 to the same period in 2019. “2019 was a strong year,” he says. “The consistent message is that week by week the buying activity is well above the numbers of 2019, which means that 2021 is a really strong.” The week of Oct. 18–24 echoed the trend: Purchase volumes stood 54% above their robust readings for the same period two years ago. “Even though rates are ticking up, the volume of home purchases is not declining as much as one would expect for this time of year,” says Pinto.