Are Real Estate Prices Going Up in 2022?
After a record year for home price growth, everyone is wondering if real estate prices will continue to increase in 2022. Some experts believe the market will continue to heat up, albeit at a slower pace, while others say the market could take a turn for the worse. Since no one has a crystal ball, we'll let the data do the talking. Here's a closer look at where real estate prices could be headed next year.
Supply and demand are the driving forces of price growth. When a product (in this case, real estate) is in high demand and short supply, its value increases. Over the past year, home values have increased over 21% year over year, according to the S&P/Case-Shiller U.S. National Home Price Index. Low interest rates, as well as record-high inflation, have been contributing factors to this rapid home appreciation, but the core of the issue is the national housing shortage.
An estimate by Freddie Mac states that the United States was short as much as 3.8 million housing units in 2020. This is a serious shortage, which undoubtedly creates higher prices for homes. But not all housing is in short supply, meaning not all real estate prices will be impacted in the same way.
Source Fool.com
