As we close out the year, two trends remain evident throughout 2021: extremely strong buyer demand and record low levels of inventory. As I write this, prices are up 17% year-over-year in Santa Clara County while inventory is down 40%. In 2022 home prices are expected to continue to rise on top of 2021 highs; and a gradual uptick in mortgage rates will make affordability a top consideration for home buyers, especially first-time buyers. While there is no reason to anticipate a falling market, the interest rate rise may have a psychological impact in dampening market exuberance.