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Houston Market Slowdown Oil Over 100 Dollars and Fed Rate Hike Odds Hit 85 Percent This Week

Rich Bonn's Houston Market Update: A Lot Happened This Week and None of It Is Simple

Last week Rich Bonn at Habayit Home Loans said if you like it lock it. This week the data explains exactly why that advice mattered. Between the Houston real estate numbers, oil prices crossing a hundred dollars a barrel, two inflation reports, and a Fed rate hike probability that jumped dramatically in just a couple of weeks, there is a lot to unpack.

What the Houston Real Estate Numbers Are Telling Us

The Houston market is slowing and the data is consistent across every major metric. Closings are down twenty percent year over year. Showings are down approximately five percent. Listing views are down fifteen percent which Rich identifies as a particularly significant number because declining views signal that buyer interest is fading even before the showing stage. Pending listings are down nearly thirty percent. New listings are down almost five percent. Homes coming off market account for another eight-plus percent decline.

The one genuinely positive note in this picture is that home prices are holding steady. Prices are not plummeting in Houston despite the volume decline. The market is slower but not collapsing on the value side, which matters for sellers who need to move property and for buyers evaluating whether they are walking into a deteriorating asset.

Nationally about nineteen and a half percent of homes that went under contract either fell out during the option period or before closing. Rich notes he has not seen numbers that high in a very long time. Getting under contract is no longer the finish line it used to feel like. It is step one of a process that has more failure points than it did during the peak market years.

Houston is sitting at some of the highest inventory levels in recent history. That inventory creates choice for buyers but as Rich observed everyone loves choice until they actually have to make a decision. Agents showing fifteen to twenty homes in a day are producing exhausted buyers who cannot remember what they saw rather than confident buyers ready to write offers.

Oil Prices and What They Mean for Everything Else

Oil crossed one hundred and three dollars a barrel on Thursday before pulling back to around ninety-nine dollars on Friday morning. That is still a meaningful number and its effects ripple through the economy in ways that show up at the grocery store, on Amazon, and anywhere transportation costs are embedded in a product's price.

Diesel crossed six dollars a gallon. Everything that moves on a truck gets more expensive when diesel is that high. Groceries go up. Food distribution costs go up. Consumer goods go up. The producer price index released Thursday showed headline inflation rising point four percent and gave neither the bond market nor Wall Street any comfort that the Fed was ready to pause.

The CPI and What It Means for Rate Expectations

The consumer price index came out Friday morning and also ran hot. Inflation remained at three point four percent in line with expectations but the point four percent month-over-month increase driven by fuel prices confirmed what Rich had been warning about the previous week. He was concerned about these numbers and the numbers delivered exactly what he feared.

The result is that the probability of a Fed rate hike at the September fifteenth and sixteenth meeting has moved from below fifty percent just a couple of weeks ago to approximately eighty-five percent as of this recording. That is a dramatic shift in market expectations in a very short period and it has direct implications for mortgage rates in the near term.

What Realtors Should Be Doing Right Now

Rich has a specific message for Houston realtors. Self-employed borrowers are an underserved opportunity in the current market. The non-traditional mortgage products that serve this population including bank statement loans, profit and loss loans, and DSCR loans are performing well and these buyers are often being turned away by conventional lenders without anyone explaining that alternatives exist.

The new appraisal changes are also in effect. Several lenders have already required the new appraisal format starting September first with broader adoption expected by October first. Rich is running CE classes across greater Houston on the new appraisal requirements and the schedule is available on his Friday post.

Seller-paid rate buydowns remain a powerful tool in the current negotiating environment. When the seller contributes toward buying down the buyer's interest rate it can meaningfully change the monthly payment in ways that move a deal forward when the buyer's payment concern is the primary obstacle.

Call Rich Bonn at Habayit Home Loans at 281-841-1723 with any questions. No video next Monday. It will be out on Tuesday instead. Have a great week Houston.

Sources

HoustonAssociationofRealtors.com
FederalReserve.gov
EnergyInformationAdministration.gov
BureauOfLaborStatistics.gov
MortgageNewsDaily.com