A view of market conditions for 2020
During a year with so many uncertainties it is often difficult to see the long range effects to the housing market. As we get further into the year there are things to consider when looking at buying a home. The outlook for interest rates if very good and they are now at the lowest we have seen in over 7 years. With rates running at about 2.8% purchasing power increases. What this means is that more home is available at the same price or the home you may want will cost less. It may also signal the time to refinance your current home to take advantage of lower monthly payments. The forecast is that rates will remain low through the end of the year and into 2021. While some may be reluctant to purchase a new home it may be the perfect time for those who have been unsure about taking the leap to homeownership.
Perspective on Interest Rates for 2019
Historically interest rates on a 30 year mortgage have been much higher than today's rates. Looking back to the 1970's rates were running at an average of 8-14%. In the 1980's rate reached as high as 19% which was 4-5 times higher than today's rates which are hovering at 4%. During the 1990's the rates were stable in the 6-9% range. The 2000's brought us lower rates, even as low as 3% during the period after 2008 when the market slumped and we had large bailouts for banks. Today's rates are still very low comparatively to what we have seen in the past. With higher wages and more stable incomes home buyers have one of the best pictures for home ownership in decades. While prices for homes have increased so has affordability of borrowing. Today is a great time to purchase a home and with the current stability in the interest rates the picture looks good for the remainder of the year.
Texas housing market breaks record for home sales, median price in 2018
Texas REALTORS® releases 2018 Texas Real Estate Year in Review report
February 22, 2019 — Austin
For the fourth consecutive year, the Texas housing market continued to break records in home sales and median price, according to the 2018 Texas Real Estate Year in Review report released today by Texas REALTORS®.
“The unprecedented real estate market activity in Texas in 2018 is a testament to the state’s business-friendly atmosphere and strong economy,” said Tray Bates, 2019 chairman of Texas REALTORS®. “It’s worth noting, though, that the rate of sales and price increases has cooled off a bit compared to prior years.”
Home sales across the state increased 1.7 percent in 2018, with 344,030 homes sold. This is a smaller increase than the 4.1 percent, 4.5 percent and 4 percent increases of 2017, 2016 and 2015, respectively. Median home prices increased 4.4 percent from the year prior to $232,900. However, similar to the number of home sales, the increase in median home price was lower than the 6.2 percent, 7.7 percent and 7.1 percent increases of the past three years. Jim Gaines, Ph.D., chief economist with the Real Estate Center at Texas A&M University, explained, “Despite another record-breaking year in the Texas housing market, home sales activity around the state slowed due to continued shortages in housing inventory and increased interest rates. We’re anticipating this will affect new home construction in 2019 due to the cost of land, shortage of labor and increased turnaround time for permitting.”
Housing inventory across the state increased 0.2 months to 3.3 months of inventory in 2018. According to the Real Estate Center, a market balanced between supply and demand has between 6.0 and 6.5 months of inventory. Homes spent the same length of time on the market in 2018 as in 2017: an average of 58 days. Active listings statewide increased 1.4 percent from 2017 to 2018.
Chairman Bates concluded, “The availability of entry-level homes priced under $200,000 has decreased 13.5 percent since 2015. Due to high demand for housing in most areas of Texas, our inventory levels are critically low, and housing affordability remains a challenge. Texas REALTORS® will continue to work with state leaders in this current legislative session to support measures that make homeownership attainable for more Texans. REALTORS® will also continue to protect Texans’ property rights and support all facets of the real estate industry as a smart investment for Texans for years to come.”