Mortgage Rates Plummet in Texas: Is Now the Time to Make Your Move?

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!

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Love, Rach

Jumbo Loans and CoLiving SFR’s: A Game-Changer for Savvy Investors in Texas

Hey there, Texas real estate investors! As a seasoned pro in the Lone Star State, I’ve spotted a twist in our housing market! Instead of chasing after those quick-flip properties perfect for short-term rentals like Airbnb, my investor clients are now on the hunt for single-family homes that can be transformed into co-living spaces.

But wait—what does this mean? And how do jumbo loans waltz in to help make these transformations happen? In this article, we’ll take a dive into the world of jumbo loans, uncover who they’re great for (spoiler alert: it’s probably you), and unravel the new conforming loan limits for 2024. Let’s get started!

What are Jumbo Loans?

Jumbo loans are mortgages that exceed the conforming loan limits set by the Federal Housing Finance Agency (FHFA). In 2024 as of this week, the new conforming loan limits for Texas are:

• 1 unit: $802,650

• 2 units: $1,000,000

• 3 units: $1,200,000

• 4 units: $1,500,000

Jumbo loans are good for those higher-end properties, or investment gems. Just remember, they usually come with a few extra hoops to jump through—like needing a higher credit score, a bigger down payment, and a tighter debt-to-income ratio compared to your typical conforming loans.

Who are Jumbo Loans Good For?

Jumbo loans are ideal for folks who are looking to purchase or refinance a property that exceeds the conforming loan limits. This can include:

• Real estate investors who want to purchase a larger property, such as a multi-unit building or a luxury home.

• Borrowers who need to tap into a higher loan amount thanks to a hefty down payment or a pricier purchase.

• Investors who want to take advantage of the benefits of a jumbo loan, such as a lower interest rates or a longer loan terms.

Why are Investors Flocking to Co-Living Spaces?

In today’s market, investors are hitting the brakes on short-term rentals like Airbnbs, thanks to cash flow challenges. The truth is, it’s just not as easy as it used to be! With interest rates where they are this year, finding a way to make those short-term rentals turn a profit is getting trickier. After factoring in property management fees, insurance, and maintenance, those golden days of snagging a property that cash flow at 1-2% feel like a distant memory.

So, what’s the new game plan? Investors are now on the lookout for single-family homes that can be transformed into co-living spaces!

Co-living setups present a fantastic opportunity for investors to take in passive income while offering tenants a unique living experience. By renting out individual rooms in a single-family home, investors can foster a community vibe while still giving each tenant their own slice of privacy and autonomy. It’s a win-win, y’all!

The Benefits of Co-Living Spaces

Co-living spaces are a win-win for both investors and tenants! For investors, these trendy setups offer:

• A reliable income stream with flexible-term leases—think creative options like three-month, six-month, and one-year agreements.

• A unique living experience that attracts tenants, leading to higher occupancy rates and happier, longer stays.

• The chance to build a community vibe, fostering a sense of belonging and loyalty among residents. (My personal favorite!)

And for tenants, co-living spaces bring:

• Affordable and flexible living compared to traditional apartments or standard shared spaces. In some cases, the right landlord will care more about resident’s showing a history of paying rent on time than a low credit score.

• The opportunity to connect with like-minded folks who share your interests and values, or may even be on the same career path.

• A welcoming sense of community, which we could all use more of—resulting in a more fulfilling and enjoyable living experience!

I’ve seen firsthand just how popular these properties are becoming! Plus, with the new conforming loan limits for 2024, financing your co-living project has never been easier.

Enter jumbo loans—a total game-changer for investors ready to elevate their co-living ventures! With these loans, you can tap into larger loan amounts and turn your vision into reality. It’s a fantastic way to diversify your portfolio and take advantage of this exciting trend!

So, if you’re curious about jumbo loans and how they can help you thrive in the co-living space, I’m here to guide you! Let’s chat and explore the endless possibilities together! Email me or call me to schedule your consultation and take the first step towards creating a lucrative co-living space investment!

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Is the Comal County Housing Market Cooling Off?

Hey, neighbors! It's your friendly New Braunfels REALtor here, back with an update on what's happening in our neck of the woods. Let's explore the Comal County data to gain a better understanding of what's in store for home prices in our area. Specifically, let's dive into the 78130 zip code and see what the data tells us what where all dying to get a feel for, the future of home prices in Unicorn Country.

Now, if you've been following along lately, you know things have been shifting. While it’s been a strong seller's market for a while, there are signs pointing towards a potential cool down. Don't worry, this isn't necessarily a bad thing! It could mean a desperately needed more balanced market for both my buyers and sellers.

Here's the deal: The good folks behind The Reventure App, which analyzes key market indicators, predicts a *moderate decline* in home prices for 78130 over the next year. Why? Let's break it down:

Recent Comal County Property Appreciation

We've actually seen home values dip slightly by 4.7% over the past year. This suggests a softening market, and that downward trend might continue.

Days on Market: Homes are lingering a bit longer before being snatched up. At 57 days on average, it's not a drastic change, but it does indicate a shift in the balance of power.

Historical Days on Market Forecast, New Braunfels, TX

Mortgage Rates: Ah, those freaking interest rates! They're still hovering above the long-term average, keeping it a bit tougher for some buyers to jump into the market.

Inventory Levels: Here's a big one – we've got more homes for sale than usual. In fact, inventory is up a significant 38.4% compared to the average. More choices for buyers often translate to downward pressure on prices.

Historical Inventory Forecast, New Braunfels, TX

Price Cuts: More and more sellers are willing to negotiate, with a whopping 43.8% slashing their asking prices recently. This is a strong signal that sellers are adjusting to the changing market.

Historical Price Cuts Forecast, New Braunfels, TX

What does this all mean for you?

For my Buyers, this could be your chance to snag a great deal! With more inventory and motivated sellers, you might have more negotiating power.

For my Sellers: Don't panic! This isn't a crash, but it's wise to be strategic. Pricing your home competitively and showcasing it in its best light will be key.

Remember y’all, this is just a forecast, and the real estate market is constantly evolving. As your local expert and advocate, I'm here to guide you every step of the way. Whether you're looking to buy, sell, or just want to chat about the market, give me a call!