Texas Home-Buying Market Trends
If you’re thinking about buying, selling or refinancing a home in the near future, be sure to watch these seven Texas housing market trends in 2020.
Buying or selling a home is one of life’s biggest decisions. You want to be ready to make the right move at the right time. But in today’s housing market, a pandemic and economic recession have complicated the process for buyers and sellers. Texans have endured a lot so far in 2020, but there are many signs of resilience, and the housing market is one of them.
After spending more time at home in quarantine, Texans are making moves to secure their homes and their future. The Texas housing market has remained steady despite economic uncertainty, and there’s good news for buyers, sellers and homeowners who are looking to refinance. Here are seven Texas housing market trends to watch in 2020:
1. High Demand for Affordable Homes
Although COVID-19 has led some buyers and sellers to postpone purchasing or listing homes for sale, we’re seeing pent-up demand for homes in an affordable price range. Affordable homes are selling faster than more expensive homes in Texas, which is a reflection of the current economy. There’s a trend in buyers downsizing their budgets due to uncertainty about jobs and the future.
The supply of homes on the market in Texas fell to a year-to-date low of 3.2 months of inventory in May 2020, and this metric is even lower at 2.4 month for homes priced below $300,000. For homes in the luxury price range of $500,000 and up, the months of inventory increased to 7.6 months in May, according to the Texas A&M University Real Estate Center.
2. Record Low Rates
The housing market is heating up as buyers take advantage of record-low mortgage interest rates in 2020. Locking in low fixed rates helps buyers secure lower payments for the life of the loan. Low rates can help you get a great deal on financing, but it also tends to drive prices up because there’s more competition for homes on the market. It’s impossible to predict when mortgage rates may hit bottom or go back up, but economists expect rates to stay relatively low as the economy recovers.
3. Refinancing Boom
With mortgage rates at historic lows, many homeowners are taking advantage of the opportunity to refinance. Refinancing to a lower rate helps lower your monthly payments, shorten your term or get cash out to pay off other debt or fund home improvements. If you’re interested in refinancing your mortgage, it pays to research your options now so you’re ready when you want to make a move.
4. Moving Home with Parents
Students moving from college campuses back home and young adults who lost jobs or can’t afford rent may be moving back in with their parents. Changing family dynamics at home might inspire plans for home renovations to improve or expand your space. If you have equity in your home, now may be the perfect time to tap into your home equity for home improvement projects.
5. Down Payment Assistance
Lenders typically prefer that homebuyers have at least 20% of the purchase price as their down payment. However, many other options exist for people — especially if they’re first-time homebuyers. A Federal Housing Administration loan, for example, only requires a 3.5% down payment, but you also have to pay for private mortgage insurance.
The Texas Department of Housing and Community Affairs offers two down payment and closing cost assistance programs. My First Texas Home is for eligible first-time homebuyers, veterans and those who haven’t owned a home in three years, and My Choice Texas Home offers down payment assistance with no first-time homebuyer requirement for those who qualify. The Harvey Homebuyer Assistance Program offers up to $30,000 in down payment assistance to income-qualified Houston residents who are replacing a home damaged by Hurricane Harvey.
6. A Digital Experience
The pandemic has accelerated the adoption of digital processes for everything from buying groceries to buying a home. If you’re shopping for a home, you may have the option to take virtual tours and complete your mortgage and title paperwork electronically. This can help speed the process and reduce the need to meet in person to complete the transaction.
With Zip Mortgage[cite::1402::cite] powered by Amegy Bank, you can start the application process for a home mortgage or refinance and submit your documentation securely online. Throughout the process you’ll be in touch with a mortgage banker who can answer your questions at every step. Find a mortgage banker at Amegy Bank or apply today.
7. Local Mortgage Lending
Working with a local lender gives you an edge, because we’re quick to respond and familiar with the ins and outs of buying, selling or refinancing a home in Texas. Whenever you’re ready to make your move, a mortgage banker with Amegy Bank can help you run the numbers and navigate your next steps.