This year's housing market was a roller coaster. In 2022, here's what to expect.

The housing market in the United States has had a scorching year. With an expected 6 million homes sold in 2021, home sales are on track to hit their highest level in 15 years.

However, whether you benefited from the boom was mostly determined on whether you were selling or purchasing a home.

According to the Federal Housing Finance Agency, average property prices increased about 20% in the third quarter compared to the same period a year ago. It was the greatest annual home price gain in the House Price Index's history. In some hot markets, the price hike was even higher.

omes were also selling at an all-time high, with sellers frequently receiving multiple competing bids and all-cash offers. Even homes that were filthy or burned out sold quickly and for significantly more than the asking price.

It was a different scenario for buyers. While mortgage rates started the year at all-time lows, finding a property to buy proved challenging. Early in the year, the supply of available properties reached an all-time low, and competition was fierce.

Many would-be purchasers exited the market disappointed and without a place to call home. As a result, rental demand increased and rents increased across the country.

"It was a crazy year," said Matt Holm, a Compass agent in Austin. He put a smaller five-year-old property on the market in January for $425,000, which was higher than similar sale prices, and received a flurry of offers. He said, "I stopped counting at 35 proposals." The house went for $545,000, which was a 30% increase over the asking price.

Another buyer, who paid $6 million for a lakeside luxury home in 2020, had offers of $9 million a few months later and $11 million two months later from buyers looking for a lakefront property, according to Holm.

"That's a lot of money," Holm added, quoting his sellers. "They intended to sell and replace it with something similar to or better. They concluded, however, that they shouldn't sell because getting anything a little nicer than what they had would cost $18 to $20 million. For a calendar year, that's a huge spike."

Without a question, the housing market in 2021 was on a roller coaster ride. As we enter the new year, here's what to expect.

No more record low mortgage rates

The year began with the lowest interest rates on record, with average rates for a 30-year fixed rate mortgage at 2.65%. But they didn't last long. By April 1, that had reached a 2021 peak of 3.18%. Rates have fluctuated since, with the 30-year fixed at 3.05% last week, according to Freddie Mac. And we can expect rates to move even higher in the new year.

The Federal Reserve has given several signals that its pandemic monetary policy will come to an end as it works to curb inflation. Ultimately, that will push interest rates higher.

The Fed's revised policy won't put a dent in the pockets of people looking to purchase a home within the next few months, but they might want to act soon, said Melissa Cohn, the regional vice president and executive mortgage banker of William Raveis Mortgage.

"Mortgage rates should remain range bound around 3% through the end of the year and hopefully through the first two months of 2022," said Cohn, who anticipates rates to increase by up to a half a percentage point over the next couple of months.

Similarly, Lawrence Yun, chief economist at the National Association of Realtors, expects the 30-year fixed mortgage rate to increase to 3.7% by the end of next year, but noted this will still be lower than the pre-pandemic rate of around 4%.

"Increased mortgage rates, coupled with inflation eating away at savings, will take a toll on buyers," said Allison Salzer, a Compass agent in San Francisco. "It will affect the lower-priced and median-priced home purchasers more than the luxury buyers."