What Will Texas Real Estate Look Like Going into 2022?
published on September 15, 2021
The Texas Real Estate Research Center released its 2021 Mid-Year Texas Housing & Economic Outlook, pointing to a more stable Texas housing market heading into 2022 once home inventory shortages from shutdown-related issues subside.
The Research Center release stated that home listings have reached a “trough” and now are rising, easing some of the price pressure. Low inventories will remain somewhat the norm, however, for the rest of the year. This, along with strong demand, means strong price growth for the rest of 2021.
Home construction continues to experience supply shortages of lumber, labor, appliances, and other construction materials, which has caused new construction prices to increase. These headwinds have not hampered growth of new construction, though, according to The Research Center, with “strong positive growth in 2021.” Growth in 2022 is expected to continue but at a slower rate, helping the market move “toward a more sustainable long-run path as the pandemic housing market frenzy dissipates.”
Mortgage rates are expected to rise slightly by the end of 2021, with historically low interest rates probably ending in 2022, according to the release, which cited changes to the Federal Reserve’s policy as well as inflation pressures as reasons for the increase. Any excess foreclosures that occur as a result of forbearance are expected to be absorbed into the market, with homes possibly sold with a gain before foreclosure.
Overall, economic growth and demographic trends such as out-of-state migration and aging millennials will drive continued Texas housing demand for the rest of this year and 2022. For 2022, experts are predicting increased home supplies coupled with strong housing demand, which should slow the growth of home prices and bring the market more into balance.
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