What the Latest Houston Association of Realtors Report Is Telling Us

Rich Bonn at Habayit Home Loans has the monthly breakdown of what is happening in Houston real estate and the mortgage markets affecting buyers and sellers right now. There is a lot moving this month and one item in particular deserves immediate attention from every real estate professional in the Texas market.

The Houston Market Numbers This Month

The fresh report from the Houston Association of Realtors shows active listings up 3.8 percent. New listings up 2.5 percent. The average list price up 7 percent.

More inventory is coming to market and that is generally good news for buyers who have been operating in a supply-constrained environment. But Rich makes a point worth sitting with. Too many choices creates its own problem. When buyers have an overwhelming number of options to evaluate the decision-making process slows down or stalls entirely. A confused mind cannot make a choice and the abundance of inventory is making it harder for some buyers to pull the trigger even when great deals are available.

Showings are up 8 percent this week which is an encouraging signal of buyer activity. Pending listings are down 22 percent reflecting properties that have already gone under contract and will soon come off the active inventory count. New listings are down 5 percent year-over-year. The net picture is a market that is roughly in equilibrium between buyers and sellers with buyers holding a slight edge because elevated insurance costs and oil prices are keeping some competition on the sidelines.

Closings are down a bit this period but Rich attributes that directly to the World Cup effect. Showings dropped during the tournament as buyers were focused elsewhere and the closing numbers are now reflecting that dip in activity from several weeks prior.

What Is Happening in the Mortgage Markets

The Strait of Hormuz situation continues to be unpredictable in ways that matter directly to Houston buyers and homeowners. Oil prices have remained volatile with the strait opening and closing in a pattern that makes any projection about energy costs unreliable week to week. Rich's framing is blunt about the uncertainty and it is accurate.

When oil prices stay elevated energy costs more and food costs more. That inflationary pressure feeds directly into the CPI reading. Rich had anticipated back in June that July would produce a favorable inflation number but oil prices moved up during July and the August reading covering July activity is expected to come in elevated. That is not good news for the interest rate environment in the near term.

The jobs picture is mixed. A significant number of hospitality jobs added during the World Cup have been cut now that the tournament has concluded. The jobs being added now are concentrated in government and healthcare. Government employment tends to grow consistently and healthcare is a durable growth sector given the aging population demographics. Outside of those two categories the jobs report has been relatively weak. The combination of a soft jobs picture and inflation that is not running hot enough to force action leads Rich to anticipate the Fed will keep rates essentially level through the end of the year.

Productivity numbers for the first and second quarters came in looking solid. Strong enough to signal a healthy economy without being hot enough to concern the Fed about overheating. That backdrop supports a stable if not dramatically improving rate environment for the balance of the year.

The Appraisal Change Every Houston Real Estate Professional Needs to Know About

The new appraisal form is coming and the timeline is now firm. The new standards will likely begin phasing in during October with a mandatory effective date of November 2nd for conventional and non-traditional mortgage loans. This is the first major overhaul of the appraisal form in twenty years and every realtor, real estate broker, and title company in Texas needs to understand what is changing before it arrives in the middle of a live transaction.

Rich Bonn is offering a one-hour continuing education course on the new appraisal changes for Texas real estate professionals. If you are interested in having that class at your brokerage or title company call his office at 281-841-1723 and the team will work out the details.

Have a great week Houston. This is Rich Bonn at Habayit Home Loans.

Sources

HoustonAssociationofRealtors.com
FederalReserve.gov
MortgageNewsDaily.com
BureauOfLaborStatistics.gov
FannieMae.com