According to S&P Global Rating “United States is experiencing increase in house prices suddenly”. This has come in a time that many of the renters had planned to buy houses in the beginning of the new year. Majority had postponed buying new houses as they hoped the price would decrease to a reasonable amount. The big question is why are housing prices going up again?
“Between May and September, we were sure the housing prices were normalizing” It was evident from many of the indicators in 2020 that the housing prices would maintain its value till the end of the year 2022. For instance, in 2020, the prices of lumber and mortgage were affordable as lumber had gone down with 70% decrease in price.
In November 2021, a new phase of hosing prices was witnessed. “The mortgage and the lumber started increasing their prices in unprecedented manner”. Most of the hosing prices have doubled their prices and some increased to about 50%.
During the Covid-19 period, the housing prices seemed to be normal before the vaccines were found. Many people had moved out from the cities and there were a lot of vacancies in many of the apartments. When the people returned, they found renters have hiked the prices and comparing with what they were required to pay, majority preferred buying a house for their families.
According to RenoFi, “The average price of the house of a single family in expected to reach 382,000 US dollars in future”. The house prices raising in the United States is also based on where one is staying. For instance, New York and Albany have experienced high house prices with New York average house price standing at 795, 000 US dollars and Albany standing at 227, 500 US dollars. “The houses are being sold at astronomical prices which is not good for the economy”, RenoFi added.
According to Robert shiller, an economist professor in Yale University, “The house prices in the United States stands around Three hundred thousand and they are expected to increase to about 48.56% in the beginning of the year 2022. Daniel Hale, Realtor.com chief economist argued that, “United States should expect hefty increment in the house prices in the year 2022”. The tenants used to ask for prices and the renters set the prices according to what was asked but for the end of the year 2021 and coming new year of 2021, US citizens should expect prices to be above what they had asked. Robert shiller added, “The housing market is experiencing increase in prices and US citizens should not expect the housing prices to go down or back to normal any time soon”.
Lambert describes the housing prices going up as the “Power of storm”. Using the forecast of housing market, Lance Lambert describes the housing market as “Red-hot”. The projections are that by the end of 2022, the housing prices will go up and few people will manage to afford the houses for renting.
Work cited
https://www.cnbc.com/select/how-much-will-a-home-in-the-us-cost-by-2030/
https://fortune.com/2021/11/29/housing-market-real-estate-predictions-2022-forecast/