Unfortunately, there is no definite answer to this question, as the property market is a notoriously volatile one. However, there are a few indicators that can give us an idea of how property prices might act next year.
One indicator is the amount of new housing being built. If the number of new homes constructed exceeds the demand for new homes then there’s a surplus of housing and a subsequent decrease in property prices.
So, well, is this the case in the US right now? Not at all. In the US, the projected number of single-family housing unit starts in 2022 is estimated to be well over one million (1.23 million). However, the number with intentions to move to a new home is growing every year, and at an ever-growing pace.
And therein lies the problem. Construction of new homes in the US simply can’t meet demand. So, prices for existing homes go up.. and in some areas, by A LOT. This is compounded by the problem that major cities with population growth simply can’t provide many housing options anymore.
Another indicator is the level of unemployment. If more people are unemployed, then they will be less able to afford to buy a home.. and prices drop.
However, even after Covid unemployment levels, housing prices barely dropped. And with employment set to increase in 2022, well.. it doesn’t seem likely prices will go down.
Why have property prices been increasing?
There are many reasons for the increase in property prices. One reason is that the seller’s market has been more resilient than we thought it would be in the face of the pandemic. Also, and on a larger scale, the economy has fared quite well over the past decade, which has led to more jobs and higher wages, which means that people have more money to spend. Another reason is that there is a shortage of properties available for sale. This has caused prices to increase as people compete for limited stock – this is especially true in places such as SF and LA.
Another factor that has contributed to the increase in prices is low interest rates. When interest rates are low, it becomes cheaper to borrow money, which means that people can afford to pay more for a property. Lastly, and perhaps most importantly, another reason for the increase in prices is foreign investment. Many investors from other countries are buying properties in the US, which has pushed up prices.
Is it better to rent or buy?
The answer to this question is it depends. There are pros and cons to both renting and buying property in the US in 2022.
For example, when you rent property, you don’t have to worry about maintenance or repairs – those are typically the responsibility of the landlord. Additionally, renting can be a good option if you’re not sure you want to stay in one place for a long time, or if you’re on a tight budget.
However, when you buy property, you can usually afford to get a larger home or apartment than you could if you were renting. Additionally, when you own property, you can deduct your mortgage interest and property taxes from your taxable income, which save you money on your taxes.
Ultimately, the best option for you depends on your individual circumstances. If you’re not sure which is better for you, consult with a financial advisor or real estate agent to help you make the best decision for your situation.