As an outcome of the COVID pandemic, several aspects of the housing market were affected in the US. Mortgage rates plunged to record lows, and the price of homes increased dramatically. As a result, Americans bought larger homes in record numbers.
In 2022, the housing market could cool off significantly following record-breaking conditions in 2020 and 2021. The skyrocketing housing costs make it increasingly difficult for young, first-time buyers to purchase a home.
During the third quarter of 2021, only 56.6% of homes sold were inexpensive for typical-income families. California is experiencing a particularly acute affordability squeeze, where home prices have skyrocketed far beyond the means of most workers.
Among the principal causes of the decline in the rental market in big cities was the shift of people from cities to suburbs. In the future, rental properties will continue to trend downward in the larger cities, as those who can afford it will likely buy a home, while those who cannot save money or pay their rent will opt for other alternatives.
Many young professionals moved back into their parents’ homes last year after giving up their apartments. According to research by PEW, young adults aged 18 to 29 lived with their parents more often in 2021 than they had in the past.
Due to the migration of residents away from big cities, apartment vacancies have reached their highest levels since 2010, and rental prices have declined. However, even though the number of vacancies on the rental market in large metropolitan areas is increasing, the demand for rental properties has increased in many mid-sized and smaller cities.