To say that 2021 has been an interesting year for the U.S housing market would be an understatement. Despite living in the shadow of a global pandemic, the housing market experienced a surprising boom that saw it shoot well ahead of the economy. Low supply has led to skyrocketing prices, with competition between buyers being fiercer than ever. Fortunately, while buyers have needed to pay top-dollar and move fast to secure their dream home, mortgage rates have remained pretty much rock bottom.

So, what can we expect from the U.S housing market in 2022?

Construction Is Slowing, Pushing Demand Higher

Unfortunately, low supply is going to continue well into the next year and beyond. The Texas Real Estate Research Center at Texas A&M University has predicted that the percentage growth in home construction will fall to single digits in 2022 in many areas of Texas.

San Antonio is expected to see the biggest drop, from growth of 27.9% in 2021 to just 5% in 2022, and other cities, including Austin, Houston, and Dallas-Fort Worth follow similar patterns, dropping from 20.8% to 5.2%, 22.5% to 5.3% and 12.8% to 6.3% respectively.

Home Prices Will Rise

And this outlook in Texas aligns quite closely with trends in other parts of the country. With homebuilding slowing, we can expect to see a stabilization in the housing market. However, as building slows and demand grows, we can expect to see prices rise. This could make affordability an issue for some demographics, particularly those who are trying to get onto the housing market for the first time and may need to borrow more than anticipated. This could also have a knock-on effect on the mortgage approval process, since lenders may require higher deposits to secure larger loans.

Mortgage Rates Should Remain Stable

The good news is that experts believe that we can expect relatively low mortgage rates to continue into next year, staying at around 3.25% for most of 2022. The reason for this is that there isn’t enough stability in the market to sustain any large increases in interest rates. That’s good news for people looking to take out new mortgages, on variable rate homeowner loans, or who are looking to renew their mortgage during the year.

Rental Prices Continue To Increase

With the supply of new homes slowing and demand increasing, we can also expect to see a progression of the already accelerating rental prices across Texas, which continue to climb at some of the highest rates ever tracked when compared with modest gains in wages. This means that any competitively priced rental properties will be snapped up virtually immediately. Meanwhile, if you are looking to purchase property as a rental investment in Texas, now would be a great time to do so.

If you would like more information about the housing market in South-Central Texas and the San Antonio area, don’t hesitate to contact B.Properties to speak to our team today.