Easing prices and more inventory likely to boost spring homebuying in Houston 

4.7.2023 10:07 am 0 Comment(s)

Houston market report April 2023

The Houston housing market has been through a rollercoaster ride over the past year, with fluctuating home prices and increasing mortgage rates. However, recent home sales data suggests that now could be a good time to buy a house. According to the Houston Association of Realtors (HAR), easing prices and more inventory is likely to boost spring home buying. 

Single-family home sales above pre-pandemic levels 

Although sales in February decreased compared to last year, they increased when compared to February 2019, the last pre-pandemic year. Additionally, for the first time in over two years, year-over-year pricing declined, and more homes were listed for sale. These factors signal promising developments for prospective homebuyers who postponed their plans due to rising mortgage rates last year.

The Houston Association of Realtors (HAR) reported that single-family home sales in February 2023 dropped by 23.0% year-over-year, with 5,723 units sold compared to 7,430 in February 2022. However, compared to pre-pandemic February 2019, sales increased by 7.2%.

HAR Chair Cathy Treviño explained that to accurately assess the Houston housing market, one must compare it to pre-pandemic levels in 2019. In this context, the market is in a similar position, with moderating prices and expanding inventory, which bode well for the spring homebuying season.

Fresh first-time home buyer incentives

As of March 2023, 30-year fixed-rate conventional mortgage rates average 6.85%, according to Mortgage News Daily, which is a significant increase from four weeks ago when rates were below 6%. This rapid rise in rates is a reminder of their unpredictability and has resulted in a 9% increase in monthly payments for first-time homebuyers, affecting their purchasing power.

However, the government has taken steps to help first-time buyers. Last month, the Federal Housing Administration (FHA) announced a plan to reduce annual mortgage insurance premiums (FHA MIP) by 0.30 percentage points. This reduction translates to a $300 per year decrease in monthly payments for every $100,000 borrowed for FHA-backed homeowners. This is the first FHA MIP reduction in over eight years and the third government intervention in the past ninety days to assist first-time homebuyers.

More homes to choose from

One of the most significant changes in the market is the increase in home inventory. Since June of the previous year, there has been a 9.7% rise in the number of homes available for sale. This increase in inventory offers more options for homebuyers, which can lead to less competition and potentially lower prices.

It’s essential to stay informed about any changes in the housing market and economic factors that may impact your decision to buy a home. Regularly monitoring mortgage rates, housing market trends, and local economic indicators can help you make well-informed decisions and identify the most opportune time to enter the market.

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