September Market Report:
Jamie Bechtold Speaks About The Fed’s Decision and Why Now’s Still a Good Time for Buyers
Sep. 25 2024
As September unfolds, the Texas real estate market is creating exciting opportunities for homebuyers. With mortgage rates lowering and inventory increasing, Jamie Bechtold, top producing realtor in the Houston area, shares key insights into why buyers should consider entering the market now rather than waiting.
The Fed’s Interest Rate Cut & What it Means for Buyers
The Federal Reserve’s recent interest rate cut by half a point was a bit steeper than most anticipated, but it had a crucial impact on the real estate market. Buyers can now expect minor fluctuations in mortgage rates, but significant drops are unlikely.
“Waiting for larger declines in mortgage rates comes with risks,” says Jamie Bechtold. “Even though rates are down, they won’t stay that way forever, and buyers should consider locking in these favorable rates now.”
Texas Home Values vs. National Trends
Home values across the U.S. are showing mixed results. In Texas, however, the housing market continues to offer attractive conditions for buyers. Nationally, the typical U.S. home value in August was $362,143, with the typical mortgage payment, assuming a 20% down payment, sitting at $1,827 per month. Mortgage rates have dropped, causing monthly payments to decline by about 3.4% from July to August, improving affordability nationwide.
However, many Texas metro areas saw slight dips in home values year over year. Here are some notable declines:
- Austin: Home values dropped by 1.0% in August.
- San Antonio: Home values fell by 2.9%.
- Dallas: Home values declined slightly by 0.4%.
- Houston: Houston home values decreased by 0.3% year over year, a small but noticeable change, offering buyers more room to negotiate in a market that’s gradually becoming more buyer-friendly.
Despite these minor drops, annual price gains in some Texas areas remain stable, providing opportunities for buyers to secure homes at prices lower than in previous months. These fluctuations offer a more affordable entry point, especially in cities like Houston, where inventory is increasing, and homes are spending more time on the market.
The Demographic Appeal of Texas
Texas continues to be one of the fastest-growing states in the U.S. thanks to its thriving economy, favorable tax conditions, and a high quality of life. Cities like Austin, Dallas, Houston, and San Antonio are attracting both young professionals and families seeking to take advantage of the strong job market, affordable housing, and lower cost of living compared to other major U.S. cities.
According to recent reports:
- Texas’ population growth outpaces the national average, with a 4.5% increase since 2020.
- Median household income in Texas is approximately $70,000, while the state’s lower taxes continue to appeal to out-of-state buyers looking for more financial flexibility.
- The state offers a wide variety of housing options, with prices ranging from $200K to over $1 million, making it attractive to both first-time buyers and luxury home seekers.
Jamie Bechtold notes that while home values have moderated in some parts of Texas, this makes it an ideal time for those seeking long-term investment properties or their primary residence.
Inventory Is Growing: More Choices for Buyers
The Texas market is seeing an increase in homes for sale, providing more options for buyers. Nationally, for-sale inventory increased by 0.2% from last month, and Texas is no exception, with more homes on the market now than at any point since September 2020. Currently, about 1.18 million homes are listed for sale across the U.S., providing a healthy balance of supply and demand.
“In Texas, we’re seeing more homes listed at competitive prices,” says Jamie Bechtold. “This gives buyers greater choice and more negotiation power.”
Mortgage Payments Are Down, Rents Are Up
Across Texas, rental costs continue to rise, with single-family home rents increasing by 4.5% year over year. At the same time, the cost of monthly mortgage payments is dropping. For buyers considering whether to rent or buy, the gap between renting and buying has narrowed, making homeownership more affordable.
“Rising rents are becoming less attractive, especially when you compare the current cost of buying a home,” explains Jamie Bechtold. “Now is the time to consider homeownership, as mortgage payments continue to drop while rents rise.”
Market Shift: The Heat Index and Buyer Power
A Shift in Market Dynamics Gives Buyers in Houston an Edge
According to Zillow’s Market Heat Index, Houston has moved toward neutral or buyer-favored territory. These shifts in market dynamics present a strong opportunity for buyers who are ready to make their move.
Houston
Houston’s real estate market is transitioning to be more favorable for buyers as inventory levels increase and homes take longer to sell. While Houston is currently a neutral market, it’s showing signs of shifting in buyers’ favor.
- Homes on the Market: In August, homes in Houston took an average of 89 days to go under contract, which is longer than during the pandemic boom, giving buyers more time to make decisions and negotiate better deals.
- Price Reductions: Nearly 25.9% of listings in Houston saw price cuts in August, allowing buyers more room to find homes within their budget and negotiate more favorable terms.
- Inventory Growth: Inventory in Houston has increased by 22.1% compared to last year, providing more choices for buyers and lessening the intense competition of previous years.
Final Thoughts from Jamie Bechtold
“With more homes to choose from, competitive mortgage rates, and fewer bidding wars, the Texas market is primed for buyers to take advantage,” Jamie Bechtold says. “This is an unusual but highly favorable moment for those ready to purchase. Waiting may mean missing out on the best rates and deals.”
Jamie Bechtold advises buyers to seize this opportunity while the market is shifting.
For expert real estate guidance and insights into the greater Houston area, connect with Jamie Bechtold today to start your homebuying journey.