Mortgage Rates Plummet in Texas: Is Now the Time to Make Your Move?
Good news for prospective homeowners – mortgage rates are at their lowest since May 2023. As of December 16, 2024: 30-year fixed mortgage: 6.85% in Texas (slightly above the 6.78% national average. ) 15-year fixed mortgage: 5.98% in Texas.
The Lone Star State's real estate landscape continues to evolve, presenting both challenges and opportunities for homebuyers, sellers, and investors. Let's dive into the latest trends shaping the Texas mortgage and refinance market as we close out 2024.
Home Prices: Steady Growth with Regional Variations
The Texas real estate remains relatively stalled, with the median home sale price reaching $345,000 in Q2 2024, marking a modest 0.6% year-over-year increase. However, there are certain markets that are outpacing the state average:
- Odessa: 11.7% price increase
- Abilene: 11.1% price increase
These figures highlight the importance of local market knowledge when considering property investments or home purchases in Texas.
Mortgage Rates: A Silver Lining for Buyers?
What are the different kinds of home loans, anyway?
There have been, and always will be, a trillion loan products for homeowners to choose from, some have held up to the test of time better than others – today mortgage rates are at their lowest since May 2023. Here’s a breakdown of the most common mortgage loan types:
As of December 16, 2024:
- 30-year fixed mortgage: 6.85% in Texas (slightly above the 6.78% national average)
- 15-year fixed mortgage: 5.98% in Texas
With positive inflation data sometimes correlates with further easing of rates, so now might be an opportune time to lock in a mortgage if you have been sitting on the sidelines to make a move.
Refinancing: Weighing the Options
While current property values may seem attractive for cash-out refinancing, it's essential to compare today's rates with your existing mortgage. The national average refinance APR stands at 6.79%, which may not be competitive for homeowners who secured lower rates in recent years.
Market Dynamics: Shifting Towards Buyers
The Texas housing market is showing signs of correcting:
- Active listings up 41% since Q2 2023
- Housing supply increased to 4.6 months of inventory (up from 3.1 months in Q2 2023)
- Price drops in key markets like Austin-Round Rock-San Marcos, Lubbock, San Antonio, and Texarkana
This shift provides more options and potentially greater negotiating power for buyers, y’all.
Texas Mortgage Options: Finding the Right Fit
Mortgages and First Time Buyer Programs come in as many shapes and sizes as there are choices of paper towel brands at your favorite Walmart. Here’s a break down of what is currently out there to explore:
1. Conventional Mortgages: Ideal for borrowers with strong credit (620+ score) and stable income.
2. FHA Loans: Great for first-time buyers or those with lower credit scores (minimum 580).
3. VA Loans: Excellent option for veterans and active military personnel.
4. USDA Loans: Perfect for rural property purchases with no down payment required.
5. Jumbo Loans: Necessary for high-value properties exceeding conforming loan limits.
First-Time Homebuyer Programs in Texas:
Texas offers several programs to make homeownership more accessible:
1. My First Texas Home: Lower monthly payments and down payment assistance.
2. Homes Sweet Texas Home Loan Program: Down payment assistance grants up to 5% of the loan amount.
3. Homes for Texas Heroes Home Loan Program: Tailored for specific professions like police officers, teachers, and veterans.
4. Mortgage Credit Certificate (MCC): Homebuyers can claim a dollar-for-dollar tax credit for up to $2,000 of their annual mortgage interest. The credit is based on the mortgage amount, interest rate, and an "MCC percentage" set by the Housing Finance Agency (HFA).
Cool Down Just In Time For Winter?
The market is correcting, my friends, potentially favoring buyers with increased inventory and steadying prices.
Current mortgage rates today are attractive, however there is no consensus amongst industry pros surrounding where rates will go in 2025. Some experts think they will stay in the mid 6% range, some protect they could go as high as 11%, depending on how inflation evolves (or hopefully not).
REMEMBER: Local market conditions vary significantly, make sure you have local experts that know your market!
As we move into 2025, I’ll keep helping you stay informed about these trends to make the best decisions for your Texas real estate journey. Whether you're a first-time homebuyer, looking to refinance, or considering an investment property, understanding the current market dynamics is crucial for success in any real estate market.
What do you think? Is there anything in particular you’ve noticed happening in your market? I’d love to hear about it, use the form below!
"There have been few things in my life which have had a more genial effect on my mind than the possession of a piece of land." —Harriet Martineau
"There have been few things in my life which have had a more genial effect on my mind than the possession of a piece of land." —Harriet Martineau
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