Texas Summer Housing Market Update
As summer comes to a close, many of you may be wondering where the Texas housing market is heading for the fall and winter months. 2023 has been an interesting year in real estate due to overdramatized media headlines, yo-yo mortgages rates, and a shortage of inventory. Both of our brokerage locations in Johnson County and Midland-Odessa have felt the effects of these national trends. As we kiss summer goodbye and look to the future, The Sales Team Realtors are here to shed some light on what changes the experts are forecasting for our housing market.
Keep reading for a glimpse at what top economists are predicting with regards to interest rates, home prices and equity (and don’t forget to contact your Sales Team Realtors for more specific guidance)!
1. Nationwide Equity
For those of you waiting for the market to crash before embarking on your real estate journey, you might be on the sidelines for a while. U.S. home equity rates are still lingering at record-highs, and there is no foreclosure crisis in sight. Eighty percent of current mortgages have a rate of 5% or lower (FHFA), so homeowners are determined to keep their homes and maintain their rate.
2. Renting Prices Rise
With so many of us focused on the housing market, it’s common to turn a blind eye to the renting world. Even as home prices increase, the price of renting is not far behind. There are nearly 3 million households that are making over $150,000 a year that are still renting. (The Wallstreet Journal) Renting a home or apartment in a desirable area can be almost as expensive as a monthly mortgage. So, don’t send your money down the drain paying a landlord’s rent—invest in your own property instead!
Pro Tip: We suggest buying your dream home—renting your rate—and refinancing once the rates come down. To learn more about this method and if it’s a good fit, contact The Sales Team to talk with an agent.
We recently attended an excellent webinar: Brian Buffini’s Bold Predictions 2023: Mid-Year Update. Watch the replay for more information on national trends and where the market is heading!
3. Easing Mortgage Rates
The topic everyone is waiting for—when will the mortgage rates drop? Experts predict the mortgage rates will begin to lower later this year, and into 2024.
“Be prepared to jump on a dip in rates.” – Robert Frick | Corporate Economist, Navy Federal Credit Union
“With the rate of inflation decelerating, rates should gently decline over the course of 2023.” – Sak Khater | Freddie Mac Chief Economist
“Mortgage rates will drop—with the 30-year fixed mortgage rate progressively falling to 6.0% this year and to 5.6% in 2024.” – Lawrence Yun | National Association of Realtors® Chief Economist
“Our forecast is for a 30-year mortgage rate to be closer to about 5.5% by the end of this year and drop a little lower next year.” – Michael Fratantoni | Chief Economist & Senior Vice President of Research, Mortgage Bankers Association
However, our local markets continue to be strong. There is still a shortage of inventory, which is keeping home prices stable. Some current homeowners are hesitant to enter the market due to today’s increased rates, but this is predicted to change once the rates lower. This is actually an opportunity for sellers to list their property while competition is low.
Experts are predicting the market to kick back into high gear once the rate hits the 5.5% range. So, if you’re looking to enter the Texas housing market, now is a great time to jump in. Once rates drop, we’re expecting the competition and pace of the market to pick up significantly – which could present new challenges for buyers.
At the end of the day, the housing market is always dependent on supply and demand. You can expect a little more motion in the real estate world as the rates slowly creep back down, but we’re predicting to see some major progress once we turn the corner into 2024. If you have questions about the market or would like to discuss your real estate goals, The Sales Team Realtors are always here to assist you with your Midland-Odessa and Johnson County housing needs. Whether you’re hoping to beat the buyer wave or need some guidance on pricing your home, we are here to guide you!