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!
First Time Home Sellers: Pricing Right Is Their Challenge
Selling your home for the first time can and will feel like navigating a maze blindfolded. You're bombarded with unfamiliar terms, pressured by timelines, and overwhelmed with the emotional weight of letting go. But perhaps the most daunting hurdle for first-time sellers is setting the right price – and sticking to it during negotiations.
Selling your home for the first time can and will feel like navigating a maze blindfolded. You're bombarded with unfamiliar terms, pressured by timelines, and overwhelmed with the emotional weight of letting go. But perhaps the most daunting hurdle for first-time sellers is setting the right price – and sticking to it during negotiations.
While the idea of haggling over dollars and cents might seem intimidating, remember this: negotiation isn’t about “winning” or “losing.” It’s a collaborative process where both parties aim for a mutually beneficial outcome. By understanding the key strategies, you can confidently navigate the negotiation process and secure the best possible price for your beloved home.
Knowledge is Power: Arm Yourself with Data
Before you even think about entertaining offers, equip yourself with the most potent weapon in your arsenal: information. Research recent comparable home sales in your neighborhood (commonly referred to as “comps”). This will give you a realistic idea of what buyers are willing to pay for similar properties in your neighborhood.
Your real estate agent will be your best resource in this endeavor, providing you with detailed market analysis and insights that you won’t be able to find on the internet. Don’t hesitate to ask questions if you don’t understand the rationale behind their pricing recommendations.
Set Realistic Expectations: The Goldilocks Principle
Pricing your home too high can deter potential buyers and leave your property languishing on the market for entirely too long. Conversely, undervaluing your home means leaving sweat, tears, and money on the table!
The key is to find the sweet spot – a price that is competitive yet realistic of your home’s unique value and reflective of what the market will support. Consider factors like recent renovations, upgrades, and desirable features that set your property apart. Remember: At the end of the day, your house is worth what someone will pay for it…not what an over/under zealous appraiser might insist it is worth.
Don’t Be Afraid to Counter: It’s a Two-Way Street
When the offers are rolling in receiving a lowball offer can be disheartening, but don’t let it derail your spirits. Remember, the first offer is just the opening volley in the negotiation game. Counteroffers are expected and provide an opportunity to find common ground.
When countering, be strategic. Don’t simply reject an offer outright. Instead, explain your reasoning calmly and respectfully and ask their agent which comps they are seeing in the neighborhood that justifies the offer. A good agent will highlight the strengths of your property and any recent improvements to justify your counteroffer.
Flexibility is Key: Finding Creative Solutions
Negotiation isn’t always about the price tag alone. Sometimes, buyers may have specific needs or requests that, if met, could sweeten the deal for you. Are you flexible with the closing date? Would you consider leaving certain appliances behind? Perhaps you’ve been sitting on the market too long and you are open to Seller Finance?
Being open to creative solutions can often bridge the gap and lead to a win-win situation for both parties.
Know Your Bottom Line: Don’t Be Afraid to Walk Away
While compromise is crucial in negotiations, it’s equally important to know your limits. Before entering any negotiation, determine your “walk-away” price (the number you need to net) – the absolute minimum you’re willing to accept.
This will prevent you from making rash decisions under pressure and ensure you don’t settle for a deal you’ll regret later.
Seek Expert Guidance: Your Real Estate Agent is Your Advocate
Navigating the complexities of real estate negotiations can feel overwhelming, especially for first-timers on any side of a real estate transaction. This is where your real estate agent proves invaluable.
The good ones are seasoned negotiators who understand and are hawkish surrounding market trends, buyer psychology, and geek out on effective communication strategies. Lean on their expertise, trust their advice, and allow them to advocate for your best interests throughout the process!
Stay Calm and Collected: Emotions Can Cloud Judgment
Selling your home can and will be an emotional rollercoaster. But it’s crucial to keep your emotions in check during negotiations.
Avoid taking low offers personally and respond professionally to all communication. Remember, there is a human on the other side of this transaction that has the same goal as you do…to buy your house! A calm and collected agent representing you makes all the difference in securing a favorable outcome.
Selling your home for the first time doesn't have to be a daunting experience. By understanding a little bit about these key negotiation strategies, trusting your real estate agent, and approaching the process with a confident and informed mindset, you can navigate the complexities of selling your home!
Ready to sell your home in Texas with confidence? Call me today and let’s have some fun negotiating!!
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"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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