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House With A For Sale Sign Inside Of A Snow Globe
Jose Velez / Money

This article is part of Money's January 2022 digital cover, which features 22 ways to make 2022 the best money year of your life. Browse all 22 articles here.

Let’s recap, briefly, how we got here.

A record-low supply of homes for sale and near record-low mortgage rates have propelled U.S. homes prices to an all-time high. The median sales price of a single-family existing home jumped about 23% in the third quarter of 2021, hitting $363,700, according to the National Association of Realtors’ quarterly report. Those rising home prices forced buyers to duke it out for a limited number of homes.

Fortunately for buyers, the market is starting to shift. Although home prices increased in the third quarter, only 78% of 183 markets measured by NAR saw double-digit year-over-year price gains, down from 94% in the prior quarter.

The number of bidding wars has also tapered off, Redfin data shows. Meanwhile, construction of new homes is picking up and bringing some much-needed supply to the market, says Robert Dietz, chief economist at the National Association of Home Builders.