Is Now the Time to Buy in Houston?

Why you should buy a home now!

The Houston Metropolitan area has been one of the hottest markets in the country for the last several years, seeing record numbers of transplants relocating from other parts of the country.?The stability of the economy, low cost of living, warm weather, political climate, as well as many other factors all contributing to the area’s popularity and growth.

With interest rates the highest they have been in 20 years many buyers have been hesitant to purchase.?In fact, according to the Fannie Mae Home Purchase Sentiment Index released May 8, 79% of consumers believe it’s a bad time to buy a house.?While I completely understand that sentiment, I have to disagree, at least pertaining to the Houston Metropolitan Area.??

Up until February, national home prices had declined for seven consecutive months, according to the Case-Shiller U.S. National Home Price NSA Index.?NAR’s (National Association of Realtors) data shows that “existing home sales decreased 3.4% in April 2023, with all four major U.S. regions registering month-over-month and year-over-year sales declines.”?All the while Houston’s market has been relatively stable regarding price.?Redfin’s report on the Houston housing market showed “in April 2023, Houston home prices were unchanged 0.03% compared to last year, selling for a median price of $340K. On average, homes in Houston sell after 28 days on the market compared to 15 days last year. There were 1,958 homes sold in April this year, down from 2,778 last year.”

Regardless of what the future holds in terms of interest rates, I believe now is a great time to buy in this market.?Why? You ask.??

If Rates Increase

If rates continue to increase due to the FED’s ongoing fight to combat inflation, your property will have likely increased in value.?Investment in single family homes tend to outperform in inflationary environments.?Especially in locales that have favorable factors like those listed above. According to a Stanford University study, residential real estate is historically an investment “safe haven” during inflationary periods. In the study, they found that with the inflation of the 1970s, home prices increased relative to the size of the economy.?Owners of residential and commercial real estate are often better off during times of rapid inflation than owners of stocks or bonds.?“Inflation makes construction more expensive, which benefits property owners because they can expect less competition from new buildings” according to the Wall Street Journal.

If Rates Decrease

If we see a decrease in rate, this market is going to appreciate rapidly in my opinion.?The demand has continued to be better than almost all other markets in the country despite the increase in rates.?If rates drop, all the factors that drove the market up in the first place are going to do so again.?If you have the foresight to buy with the rates at their current levels, you will likely see the asset will have substantially appreciated in value once the rates start dropping.?You can refinance to take advantage of the reduced rate!?If you purchased initially with less than 20% down, you might be able to have the mortgage insurance removed from your payment if your equity position has improved enough with the asset’s appreciation.??

While right now might not be the right time for some of you to buy a home, for others it could be the perfect time!

If you want to discuss your particulars, we are just a phone call away.

Thanks,

Spence Drake Business Development Manager Draper & Kramer Mortgage 713-303-0800

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