What Is Actually Happening in Houston Real Estate and Mortgage Markets Right Now

Rich Bonn at Habayit Home Loans has the weekly breakdown of what is moving in Houston and what every agent and buyer needs to understand heading into the back half of summer. There is a lot happening and one item in particular deserves immediate attention from every real estate professional working in the Houston market.

The Houston Market Numbers This Week

Showings are up 3 percent year over year which is one of the most encouraging signals in the current data. People are out looking. Serious buyers are moving. Listings are up 8.1 percent providing more inventory for those buyers to evaluate. Pending listings are down and closings are down as well but the explanation is straightforward. Thirty days ago fewer contracts were being written and closings reflect the contract activity from a month prior. The current showing activity suggests that dynamic is shifting.

The traditional selling season is technically over but from Rich Bonn's perspective at Habayit Home Loans the market is actually getting busier rather than quieter. More people are applying for mortgages. More showings are happening. The off-season does not appear to be behaving like a typical off-season.

The Paralysis by Analysis Problem

Here is the challenge that comes with increased inventory that most market commentators do not address. When buyers have only one or two homes to consider making a decision is relatively straightforward. When they have dozens of options the decision-making process can stall completely.

Rich describes going to purchase a truck recently and the dealer showing him exactly one truck. That was the truck he bought. The principle applies directly to home buying. Buyers who are drowning in options often cannot commit to any of them. As inventory in Houston continues to run above historical norms agents who can help buyers narrow their criteria and get focused on a defined set of targets are providing a service that goes well beyond just opening doors.

The Fed Decision and What It Actually Means

The Fed held rates again at this week's meeting. This is the longest rate hold since 2008. Fed Chair Kevin Warsh is not moving toward cuts despite political pressure and the data he is using to make that decision is worth understanding.

Warsh has indicated a preference for the Dallas Fed Trimmed Mean as his inflation indicator of choice. This measure removes the noise from the inflation calculation by stripping out volatile components like oil prices and statistical blips to focus on what Americans are actually spending their money on at the core level. The Dallas Trimmed Mean is currently showing inflation at 2.2 percent with projections suggesting 2.4 percent next month. Both numbers are close to the Fed's 2 percent target but moving in the wrong direction.

Personal Consumption Expenditures, another of the Fed's preferred measures, fell from 4.1 to 3.7 percent year over year. Part of that improvement came from the period when oil prices fell due to reduced conflict in the Persian Gulf. That oil price relief is now reversing. The conflict is back up, oil prices are moving higher again, and the August reading of July inflation is expected to come in elevated as a result.

The ten-year Treasury yield is currently sitting at 4.7 percent. Earlier this year it was closer to 3.8 to 3.9 percent. That move in the ten-year yield is the direct explanation for why mortgage rates have been trending upward. Bond yields and mortgage rates move together and a ten-year at 4.7 is not a rate-cut environment regardless of what the Fed calendar looks like.

The Appraisal Change Houston Agents Need to Know About Right Now

This is the most important item for every real estate professional in the Houston area and it has not received the attention it deserves.

The appraisal form is changing effective November 2nd. This is the first major overhaul of the appraisal form in twenty years. The last significant update happened in 2005 and agents who have been working in real estate since then have built their entire understanding of the appraisal process around a form that is about to look completely different.

The new form moves away from the checkbox-heavy structure that has governed residential appraisals for two decades and toward a narrative framework that gives appraisers more flexibility to explain value. Custom upgrades, outdoor living spaces, ADUs, energy efficient features, and other characteristics that the old form struggled to capture accurately can now be documented in a more complete and defensible way. The change affects how value is communicated, how comparables are selected and presented, and how the entire appraisal report is structured.

Agents who do not understand the new form are going to face confusion, delays, and client conversations they are not prepared for when November arrives. Agents who understand it will be able to set accurate expectations, explain the process confidently, and position their clients for smoother transactions.

The Continuing Education Class Rich Bonn Is Teaching

We are teaching an Appraisal changes class for Real Estate Agents in the Houston Area. These changes are crucial to their everyday lives and haven't changed since 2005. Getting ahead of this before November rather than learning about it in the middle of a transaction is exactly the kind of preparation that separates agents who handle it smoothly from those who do not.

If you are interested in having this class at your brokerage or title company reach out to Rich Bonn directly. This is available for Houston area real estate professionals and the timing matters given how close November is getting.

Reach out to Rich Bonn at Habayit Home Loans at 281-841-1723 or [email protected] with any questions about the market update, the appraisal changes class, or what the current rate and inventory environment means for your buyers and sellers.

Sources

HoustonAssociationofRealtors.com
FederalReserve.gov
MortgageNewsDaily.com
FannieMae.com
DallasFed.org