Houston Housing Market Update: Closings Up 5.2 Percent, Affordability Improving, and What Iran Means for Rates

A Lot Is Moving Right Now and Here Is What Actually Matters

The mortgage market and the Houston real estate market both have meaningful developments worth paying attention to this week. The two stories are connected in ways that affect buyers, sellers, and investors and understanding both gives you a clearer picture of where opportunity lives right now.

What Is Driving Mortgage Rates This Week

The biggest driver of everything happening in the mortgage market right now is the Middle East situation, specifically Iran, the Strait of Hormuz, and the ongoing negotiations between Iran and the United States over potential deal terms.

Markets have been reacting positively to the possibility of a deal. Oil prices have been moving lower in response to that optimism and when oil prices drop inflation pressure eases and interest rates tend to follow lower. The excitement around lower oil prices has been so significant that it has actually eclipsed what would normally be unfavorable rate news. April job creation numbers came in between 66,000 and 100,000 which under normal circumstances would put upward pressure on rates. In the current environment the oil price story has dominated and rates have been improving despite that jobs data.

Here is the important caveat. The situation is genuinely uncertain. Nobody knows exactly who is making decisions on the Iranian side of the negotiation. The UAE and several other countries in the region have signaled interest in Iranian regime change which could derail any deal entirely. The positive momentum in the market is real but it is fragile.

As Rich Bonn of Habayit Home Loans explains directly: if you like the rate you have right now lock it. Do not wait to see what happens next. The window that exists today could close quickly if geopolitical developments shift and there is no reliable way to predict which direction things move from here. Locking a rate you are comfortable with is the right move in a volatile environment.

What Is Happening in the Houston Market

The Houston real estate market is telling an encouraging story right now and the data behind it deserves more attention than the surface level numbers suggest.

Closings are up 5.2 percent year over year. That is a meaningful increase in completed transactions and it reflects genuine buyer activity rather than just increased browsing or listing volume. Active listings are up 7.2 percent in April. List prices have come down 1.4 percent. New listings are up slightly.

The list price decline is worth addressing directly because it generates the kind of headline that gets misinterpreted. As Rich Bonn explains the reduction in average list price is not a signal that Houston home values are depreciating. It reflects a shift in the composition of what is being listed and sold. More starter homes and entry-level move-up properties are coming to market. Fewer high-dollar listings are turning. When the mix shifts toward lower price points the average comes down without individual home values declining.

This is actually good news for the market because it means more inventory is becoming available in the price ranges where the largest number of buyers are searching.

Houston Affordability Is at Its Best Level in Years

The affordability picture in Houston right now is genuinely significant. A family earning $96,000 per year can afford to purchase a median-priced home in the greater Houston area. That threshold means approximately 42 percent of greater Houston households can currently afford to purchase a home which is a notably higher percentage than has been achievable in recent years.

Texas-wide affordability is tracking similarly which puts the state in a meaningfully better position than the national average where affordability has improved only modestly.

Several factors are driving this improvement together. Appreciation rates have settled from the aggressive pace of the pandemic years. More starter homes are available. Builders are offering meaningful incentives to move inventory. And sellers have become more realistic about pricing, no longer attempting to list $40,000 to $50,000 above market value hoping the 2021 environment is still in effect.

Showings are up. HAR listing views are up. The market activity signals are positive across the board.

A Note on the May 20th CE Event

For licensed real estate agents in the Houston area Rich Bonn is hosting a four-hour elective continuing education event on May 20th from 9:30 a.m. to 2:30 p.m. The first two hours will cover personal branding mastery with AI with coach Tim Davis whose strategies have contributed to 519 percent year-over-year business growth. The second two hours will address how to get a mortgage when your tax return says no covering non-QM options including bank statement loans and alternative income documentation programs for self-employed buyers. The event is sponsor-funded. Reach out to Rich Bonn at Habayit Home Loans for details.

Sources

HoustonAssociationofRealtors.com MortgageNewsDaily.com EnergyInformationAdministration.gov FreddieMac.com CNBC.com