Single Family Closings in Houston - Past 8 years historical perspective to Nov30, 2022

Dated: December 5 2022

Views: 156

The transaction volume over the past 30days has declined across the Houston market.  In fact it's dropped pretty steadily since August2022 when we were still at the long run average. 

Don’t get faked out.  Keep an eye on the big picture – and maintain a long term view. 

While the drop is expected (it’s a seasonal phenomenon that happens EVERY YEAR - see the chart above), this year, the drop is more significant than in most prior years.  Closed transactions fell from a total of 8,349 homes sold in August2022 to 5,666 homes sold in November2022.  That's a 32% drop in activity.  Much bigger drop than the normal 23% decrease.   


As we all know, the FED raised short term rates and that helped push mortgage rates higher.  Overall inflation is pinching everyone's wallets too.  And we expect rates to go up again in December.  Mortgage rates have now gone from just over 3% in November2021 to just under 7% now.  More than double. 


On a $400,000 home, that means the monthly principal and interest expense on this same property increased just about $900 per month.  Ouch!

 

It’s no surprise many folks are tricked into not buying the homes. 

 

The bigger picture is that rates are ever changing, refinancing is possible, incomes continue to increase, and property values continue their march upward.  Long term, owning a home (or several) is the magic bullet for most people looking to grow generational wealth. 

 

Homes are still getting listed (I put one on the market last week and wrote a contract to buy another this past weekend).  Deals are getting done. 

 

If you want to get a great deal, now may be the time for you to have a serious conversation with your Realtor about the full picture.  Study the numbers and understand the value out there.  Not just for right now, but what owning properties looks like for your financial picture 5 or 10 years down the road.

 

Check back later this week for a strategy oriented blog post.  Get some insight into the relationship between mortgage rates, treasuries, employment statistics, and long run value of income properties. 


You may find the news can be to your advantage.  Ever thought of buying income properties?  Now may be a great time in the Houston market.

 

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Dave Jensen

I started Real Estate Investing in 2006 by accident.  Instead of selling my home, I rented it to a friend and his small family from the neighborhood who needed a place to live. Then my Realtor he....

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