Housing-Insight-February-2022-Summary

Texas Housing Insight February 2022 Summary

by Real Estate ArticlesResourcesStats

Texas’ housing market fell slightly in February as supply constraints continued pushing downward on the market, and mortgage rates increased. February sales and active listings were both down, resulting in an inventory level of about one month. Housing starts rose despite the continued surge in building material prices and dip in permits. The greatest challenge remains for homes in the lower price cohorts, as supply still has not caught up to the unprecedented demand. The state’s diverse and expanding economy, favorable business policies, and steady population growth, however, support a favorable outlook.

Supply1

The Texas Residential Construction Cycle (Coincident) Index, which measures current construction activity, increased both nationally and within Texas as employment exceeded the pre-pandemic level, and construction values accelerated. The Texas Residential Construction Leading Index (RCLI) advanced, signaling an expected elevation in future activity. The most influential metric in the leading index was the rise in residential construction value among new construction starts.

Single-family construction permits contracted half a percent seasonally adjusted for February, lagging the national increase of 3.9 percent month over month (MOM). Austin and Dallas-Fort Worth permit activity fell 10.7 and 0.3 percent, respectively. Houston and San Antonio, on the other hand, increased 9.1 and 2.4 percent, respectively. Houston’s permit growth rate topped the national list, issuing 5,316 permits, while Dallas followed with 4,091.

Lumber prices rose 11.4 percent in a month and were up 78.3 percent year over year (YOY), drastically raising the costs associated with home building. Despite the lumber market disruption, robust economic conditions and copious demand pushed total Texas housing starts up for the fourth consecutive month, soaring 11.3 percent MOM. However, single-family private construction values subsided 0.7 percent MOM. Austin accounted for the majority of the loss with a 23.4 percent dip from the previous month, while San Antonio had a 0.1 percent decrease. Dallas-Fort Worth was unchanged, and Houston posted an 8.3 percent hike.

Texas’ months of inventory (MOI) remained one-month in February while the U.S. had 2.5 months of inventory for the same period, accentuating how intense housing demand is in Texas. Supply continued to be an issue across all price categories but especially for homes in the lowest price range. Total housing inventory is still tight in Texas’ four biggest metros. Both Austin and DFW remained below one month while Houston and San Antonio were slightly above.

Demand

Texas home sales were down from January, ending February slightly above 28,000. Sales fell in each of the four major Texas metros except San Antonio, where sales grew by almost 1 percent. February sales were negatively impacted by rising mortgage rates and higher home prices that continue to shut out some potential homebuyers.

The Federal Reserve is expected to reduce its balance sheet assets and increase the Federal Funds rate at least two to four times in 2022. The ten-year U.S. Treasury bond yield rose to 1.8 percent2, up 0.3 percent from the previous month. The Federal Home Loan Mortgage Corporation’s 30-year fixed-rate hovered around 3.5 percent, rising 0.4 percent over the previous month. The median mortgage rate for the typical Texas homebuyer climbed to 3.5 percent for government sponsored enterprise (GSE) loans in January3 and to 3.2 percent for non-GSE loans. February home-purchase applications inched up by 3.1 percent year to date (YTD), while refinance activities declined by 23.4 percent. (For more information, see Finding a Representative Interest Rate for the Typical Texas Mortgagee). 

In January, the median loan-to-value (LTV) constituting the “typical” Texas conventional-loan mortgage dropped from 87.7 a year ago to 83.8. The debt-to-income ratio (DTI) stayed unchanged from a year ago at 36.4 YOY, while the median credit score increased 8.7 points to 752.8 over the same period. The LTV for GSE borrowers stayed constant from December through January at 85.5; meanwhile, their DTI increased slightly from 36.8 to 37.3.

Prices

Texas’ median home price continued to increase, consistently growing since the start of the pandemic. Austin remains at the top with half the homes selling for almost $500,000. DFW is a distant second with a median home price around $375,000. Median prices for both Houston and San Antonio hovered slightly above $300,000.

The Texas Repeat Sales Home Price Index accounts for compositional price effects and provides a better measure of changes in single-family home values. The Texas index has risen 31.7 percent since the pandemic started. Texas home prices were up 1.24 percent MOM, escalating for the 21st consecutive month. While growth in all other metros accelerated at a steady pace, Austin’s explosive growth has slowed since last summer. In summary, Texas’ overall increasing home prices decreased its affordability advantage over states like California.

At the metropolitan level, Austin’s repeat sales home price index value surpassed all other metros with 29.1 percent YOY growth. Corroborating with the growth rate of median prices, Dallas followed with a 28 percent YOY expansion. Fort Worth and San Antonio’s indexes rose 23.3 and 19.7 percent, respectively. Houston followed with a 16.9 percent gain.

Household Pulse Survey

According to the U.S. Census Bureau’s Household Pulse Survey, the share of homeowners unable to make next month’s mortgage payment increased on a state level. Over 8.6 percent were “not at all confident” or only “slightly confident” they’d be able to make payments. The national average was just over 7.1 percent (Table 1). The number of Texas mortgage owners facing foreclosure increased (Table 2). However, the share of respondents who reported themselves as “not likely at all” to lose their house due to foreclosure also increased, inching up 1 percent to 43 percent. This is marginally above the national average of 42.9 percent (Table 2).

________________

1 All measurements are calculated using seasonally adjusted data, and percentage changes are calculated month over month, unless stated otherwise.
2 Bond and mortgage interest rates are nonseasonally adjusted. Loan-to-value ratios, debt-to-income ratios, and the credit score component are also nonseasonally adjusted.
3 The release of Texas mortgage rate data typically lags the Texas Housing Insight by one month.

Source – Joshua Roberson, Weiling Yan, and John Shaunfield (May 31, 2022)

https://www.recenter.tamu.edu/articles/technical-report/Texas-Housing-Insight

April 2022 DFW Area Real Estate Stats

by Real Estate ArticlesResourcesStatsVideo

April stats are here and we have the numbers! 

The housing market in North Texas continues to be hot! New listings are up consistently in all five counties over March 2022 as the Spring market continues to heat up. Despite higher mortgage rates, demand remains strong in North Texas. Average sales prices are up ranging from 16% in Dallas County to 35% in Rockwall County compared to April 2021.

Our stats infographics include a year over year comparison and area highlights for single family homes broken down by county. We encourage you to share these infographics and video with your sphere.

For more stats information, pdfs and graphics of our stats including detailed information by county, visit the Resources section on our website at DFW Area Real Estate Statistics | Republic Title of Texas.

For the full report from the Texas A&M Real Estate Research Center, click here. For NTREIS County reports click here.

Lingo You Should Know

Lingo You Should Know

by Real Estate ArticlesResources

When you are preparing to buy a home, there are many words that may be unfamiliar to you. This list of
commonly used real estate terms is intended to help you in the home buying or selling process.

Appraisal
The estimated value of a property based on a qualified appraiser’s written analysis. Banks typically require appraisals before issuing loans to ensure the estimated value of the property adequately supports the sales price and the loan being taken out by the Buyer.

Appreciation
The increased value of your home from when you purchased it is considered its appreciation in value.

Assessed Value
This is the dollar value that the county appraisal district assigns to your home for the purpose of property taxes. This value may differ from a home appraisal value or market value.

Buyer’s Agent
A real estate agent who represents the interests of homebuyers.

Closing Costs
These refer to miscellaneous expenses to close the deal. Expenses can include recording fees, title insurance, commissions, surveys, and more.

Closing Disclosure
Final account of your loan’s interest rate and fees, mortgage closing costs, your monthly mortgage payment, and the total of all payments and finance charges. This document also notes the amount the Buyer has to bring to closing.

CMA
CMA stands for Comparative Market Analysis. This report looks at similar homes in your area that were sold or are currently on the market and can help determine an accurate value for your home.

Comparables
Also known as “Comps.”, which are used as a comparison in determining the current value of a property that is being appraised.

Contingencies
Particular conditions that must be met prior to closing a real estate transaction such as a home inspection (to ensure the home has no serious defects), a financing contingency (which releases a Buyer from the sales contract if their loan falls through), or a contingency that a Buyer must first sell their current home.

Deed
The recorded legal document transferring ownership or title to a property.

Deed of Trust
A recorded lien on the property which secures the Promissory Note and gives the lender the ability to foreclose if there is a default.

Earnest Money
Money that the Buyer deposits with the title company or directly with the Seller as a good faith gesture that they are serious about buying a home.

Effective Date
The date the Buyer and Seller have agreed to all terms and actually executed the contract.

Escrow
A legal arrangement in which a third party temporarily holds large sums of money or assets until a particular condition has been met (e.g., the fulfillment of a purchase agreement).

Executed
When a legal document has had its contents agreed upon by the Buyer and Seller and is signed by all parties to the document it is Executed.

HOA Resale Certificate
A document issued by a Property Owners Association or Condo Association (if applicable) that outlines the fees associated with the transfer of the property that are to be collected from the Buyer and Seller at closing.

Home Inspection
A thorough professional examination that evaluates the structural and mechanical condition of a property (plumbing, foundation, roof, electrical, HVAC systems, etc.) to identify problems with the house before purchasing. A pest inspection is also common as well as a pool inspection when applicable.

Home Warranty
Limited Warranty Coverage on some of the items in your home that can lead to costly repairs when in need of work, such as, HVAC systems, appliances, and even pest control. Every policy is different, it is important to understand what is covered and what is not. The Seller can provide a dollar amount towards a Home Warranty if it is selected and agreed upon within the contract.

Mortgage Lender
The lender providing funds for a mortgage. Lenders also manage the credit and financial information review, the property and the loan application process through closing.

Multiple Listing Service (MLS)
The MLS is a local organization that collects, catalogs, and distributes home listings for sale and lease as well as data on past sales. REALTORS® get access to the MLS by being a paid member of the organization. Some of the information in the MLS is distributed to popular listing websites.

Offer
A formal request to buy a home. This is most often presented to a Seller in the form of the contract and addenda required to purchase/sell a property that outlines all the terms and conditions of the offer.

Principal
The remaining unpaid balance on your mortgage. At closing, accrued and unpaid interest on the principal will also be due and payable.

Real Estate Agent
A professional with a real estate license who has passed a test as required by the state who may represent a Buyer or Seller in a real estate transaction.

REALTORS®
This is a real estate agent who is also a member of the National Association of REALTORS®, meaning they uphold certain standards and codes of ethics.

Real Estate Broker
A real estate agent that has additional education, has passed the state Broker’s exam, and meets minimum transaction requirements.

Real Property
Land and anything permanently affixed thereto — including buildings, fences, trees, and minerals.

Sales Contract
The finalized and executed contract and applicable addenda.

Seller’s Agent
The real estate agent who represents the Seller of a piece of property. Their job is to act in the best interests of the Seller, marketing their home to potential Buyers, and negotiating on the Seller’s behalf.

Survey
A drawing of your property prepared by a Registered Professional Land Surveyor that locates the boundary lines, any improvements, easements, building lines, encroachments of any structures or improvements over the property lines, easements, or building lines on the property.

Survey Deletion Coverage
The Owner’s Title Policy contains a standard exception to: “Any discrepancies, conflicts, or shortage in area or boundary lines, or any encroachments or protrusions, or any overlapping of improvements.” When the Buyer purchases Survey Coverage, and the survey has been approved by the title company this standard exception is amended to remove everything except the words “shortages in area” and exceptions are added to exclude any matters currently shown on the survey from coverage in the Policy.

Title
Document that refers to your right of ownership and thus your ability to sell.

Title Insurance
Insurance purchased to protect against any unknown liens or debts that may be placed against the property as well as any claims by anyone else that they own or have any rights to your property that are not known or disclosed at closing.

Click here for print version.

Housing-Insight-January-2022-Summary

Texas Housing Insight January 2022 Summary

by Real Estate ArticlesResourcesStats

Texas housing sales continued to rise in January, compounding gains despite ongoing supply constraints. The months of inventory (MOI) slid to 1.4 months, putting downward pressure on the market. Single-family permits, however, increased, and housing starts continued to rise despite steep price hikes in lumber and other building inputs. Finding homes priced below $300,000 remained a great challenge to many Texans as inventory cannot keep up with booming demand. Sales have remained strong despite ongoing inventory limitations, particularly among lower priced cohorts. The state’s diverse and expanding economy, favorable business policies, and steady population growth still support a favorable outlook.

Supply1

The Texas Residential Construction Cycle (Coincident) Index, which measures current construction activity, decreased nationally and in Texas due to falling employment outweighing heightened construction gains. The Texas Residential Construction Leading Index (RCLI) possibly reached a trough, signaling an increase in future activity. The downward trend was reverted by an increase in weighted building permits and residential construction value starts along with the ten-year real Treasury bill continuing to fall. The leading indexes among the major metros, however, continued to decline. Current inflationary conditions due to supply chain issues are putting downward pressure on construction activity and may impede construction activity in the coming months.

Single-family construction permits surged 7.1 percent, beating out the national increase of 6.5 percent month over month (MOM). Houston and Dallas-Fort Worth (DFW) remained on top of the national list and outnumbered Phoenix by approximately 1,000 permits. The largest rate of change of the major Texas metros came from San Antonio and DFW at 10 percent and 7.1 percent, respectively. Houston issued the highest number of permits at 4,837, marking a 2.2 percent uptick, while Austin issued 2,295 permits for a rise of 6.4 percent. Texas multifamily permits dropped 15.5 percent MOM; however, the metric was up 4.3 percent year to date (YTD).

Lumber prices soared 61.2 percent, drastically increasing the cost of home building. Despite the lumber market disruption, robust economic conditions and copious demand pushed total Texas housing starts up for the third consecutive month, increasing at 2.1 percent. Single-family private construction values also increased in real terms. Austin and Houston values ticked up 4 and 3 percent MOM, respectively, contributing to the majority of the 2 percent uptick in statewide values. Dallas and San Antonio posted negative numbers at 1 and 3 percent, respectively.

Texas’ months of inventory (MOI) fell to 1.4 months as active listings remained retracted while demand stayed high. A total MOI around six months is typically considered a balanced housing market. Supply remained severely limited, dropping across all price categories but most notably for homes in the lowest price range. The inventory for homes priced $200,000-$299,999 dropped to 0.94 months, and the lowest cohort (homes price less than $200,000) dropped 0.1 to 1.34 months. Total housing inventory in the major metros dropped significantly with the MOI remaining most constrained in Austin at 0.4 months. The metric in North Texas fell to 0.7 and 1.0 months in Dallas and Fort Worth, respectively. Houston’s MOI stayed steady at 1.6 months, while San Antonio declined to 1.5 months. Dwindling inventory persisted as a major headwind to the health of Texas’ housing market.

Demand

Monthly housing sales reached an all-time high for January in Texas with 38,900 closed listings in January. Total housing sales started off strong in 2022 with a 9.5 percent MOM increase, and the gains occurred across all price cohorts. The greatest increase was the $400,000-$499,999 cohort at 24 percent, while the lowest cohort rose only 4.7 percent by comparison. Houses in cohorts priced above $300,000 nearly doubled the percent gains in sales compared with those priced in the lowest two categories.

Housing sales increased across all major metros, led by Houston at 20.6 percent MOM. San Antonio followed with a hike of 8.7 percent. Meanwhile, Dallas and Austin experienced a 5.2 and 5.0 percent sales increase, respectively.

Texas’ average days on market (DOM) rose marginally to 33 days, increasing 0.5 percent MOM. The state DOM started rebounding since hitting a historical low of 29 days in August 2021, and it had continued rising for five consecutive months. Despite the marginal improvement in the buyers’ market, Austin remained the hottest housing market with an average DOM of 23 days. Dallas and Fort Worth’s DOM remained steady at an average of 26 days. DOMs for Houston and San Antonio were slightly higher than the state average, both at 34 days.

Market expectations are for the Federal Reserve to accelerate the tapering of assets purchases and to increase the Federal Funds rate in 2022 in an effort to combat rising inflation. The ten-year U.S. Treasury bond yield rose to 1.8 percent2, up 30 basis points from the previous month. The Federal Home Loan Mortgage Corporation’s 30-year fixed-rate hovered around 3.1 percent for the third consecutive month. The median mortgage rate for the typical Texas homebuyer climbed to 3.3 percent for GSE loans in December3 and rose to 3.1 percent for non-GSE loans. Refinance applications have declined on a monthly basis and were down 37.5 percent year over year (YOY). MOM purchase and refinance applications diminished 12.4 and 13.6 percent, respectively. (For more information, see Finding a Representative Interest Rate for the Typical Texas Mortgagee). 

In December, the median loan-to-value ratio (LTV) constituting the “typical” Texas conventional-loan mortgage dropped from 86.7 a year ago to 83.5. The debt-to-income ratio (DTI) declined from 35.8 to 35.3 YOY, while the median credit score increased 4.8 points to 753 over the same period. The LTV for GSE borrowers dipped slightly from 85.3 in November to 84.9; meanwhile, their DTI also dropped slightly from 36.6 to 36.3.

Prices

The ongoing shift in the composition of sales and price effects boosted the average and median home price. The Texas median home price rose for the 14th consecutive month, appreciating 1.9 percent on a monthly basis and 16 percent YOY to a record-breaking $376,363. The five major metros all hit historically high median prices. Austin led the pack with a median home price of $518,390 increasing 3.3 percent MOM. Dallas followed suit rising 2.7 percent to reach a median price of $408,572. The Houston metric ($325,077) and Fort Worth metric ($339,679) increased 2.5 percent and 1.8 percent, respectively, while the San Antonio metric ($308,279) gained a modest 0.7 percent.

The Texas Repeat Sales Home Price Index accounts for compositional price effects and provides a better measure of changes in single-family home values. Compared with January 2021’s 8.9 percent YOY increase, Texas’ index corroborated significant home-price appreciation, accelerating 19.6 percent YOY in 2022. The repeat sales index accelerated in all major metros for 14 consecutive months. The metric grew most rapidly in Austin with a 33.7 percent YOY increase. San Antonio posted a 19.9 percent annual hike, where Houston reported a similar climb of 16.5 percent. Prices in North Texas increased 26.2 and 23.8 percent in Dallas and Fort Worth, respectively. Increasing home prices pressured housing affordability, decreasing Texas’ affordability advantage over other states like California.

Single-Family Forecast

The Texas Real Estate Research Center projected single-family housing sales using monthly pending listings from the preceding period (Table 1). Texas sales reached a recent peak in December 2021, and the values have since declined. In February, Texas sales are expected to fall 2.7 percent. Likewise, the metric is estimated to dip 0.5 percent in Houston. Transactions in San Antonio are forecasted to plummet 3.2 percent. Austin and DFW are expected to see significant losses of 4.1 percent and 4.2 percent, respectively. Despite the monthly declines, sales from January to February 2022 should accelerate relative to the same period in 2021, with Houston anticipating a cumulative growth of 11.1 percent.

Household Pulse Survey

According to the U.S. Census Bureau’s Household Pulse Survey, the share of homeowners behind on mortgage payments balanced on the national level, and the share stepped up at the state level (Table 2). Meanwhile, for these mortgage owners, fewer of them needed to face the possibility of leaving due to foreclosure in Texas. The share of Texas respondents who reported themselves in the “not likely at all” group for leaving their house due to foreclosure jumped 15 percent, while the share reporting “somewhat likely” plummeted 9 percent (Table 3). In Houston, while the delinquent homeowners due to foreclosure remained high, more than half of the “not very likely” group predicted themselves as “not likely at all” to leave their house due to financial difficulties.

________________

1 All measurements are calculated using seasonally adjusted data, and percentage changes are calculated month over month, unless stated otherwise.
2 Bond and mortgage interest rates are nonseasonally adjusted. Loan-to-value ratios, debt-to-income ratios, and the credit score component are also nonseasonally adjusted.
3 The release of Texas mortgage rate data typically lags the Texas Housing Insight by one month.

Source – Joshua Roberson, Weiling Yan, and John Shaunfield (May 3, 2022)

https://www.recenter.tamu.edu/articles/technical-report/Texas-Housing-Insight

May-Landscape-Tips

May Landscape & Gardening Tips & To-Dos

by Real Estate ArticlesResources

Need help planting a successful garden or landscape? Here are some May planting tips from the Dallas Arboretum horticulture staff and the Dallas County Master Gardeners that can help keep your home garden looking beautiful this Summer. Heat tolerant plant care should be your focus in May.

  • Plant your heat tolerant summer annuals and tropicals, if you haven’t already. Our favorites for the heat are Lantana, Ornamental Sweet Potato Vine, Purple Fountain Grass, Ornamental Peppers, Coleus, Elephant Ears, Caladiums, Pentas, and Tropical Hibiscus.
  • Continue planting perennials, trees and shrubs. Just be sure to water them in well as the temperature rises and continue watering them regularly, making sure to saturate the root ball on trees and shrubs as much as twice per week, throughout the summer.
  • The last of the heat tolerant veggies and annual herbs can be planted until mid month, including Southern Peas, Sweet Potatoes, Basil and Oregano.
  • Fertilize your lawn and garden with a high nitrogen fertilizer, following recommended application rates.
  • Be sure to water grass regularly during the hot summer months, up to one inch depth, 2 to 3 times weekly, or what your city water restrictions will allow.
  • Mow your lawn once per week to maintain good healthy growth and reduce any unnecessary wear and tear on lawn equipment.
  • Continue pruning and reshaping any spring blooming shrubs and vines after they finish flowering.
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March 2022 DFW Area Real Estate Stats

by Real Estate ArticlesResourcesStatsVideo

March stats are here and we have the numbers! 

The Spring selling season is underway, and the market reflects that with new listings up in all five counties, though they are just slightly down from March 2021. The average days on market continues to drop each month and averages 21 days in Collin, Dallas, Denton, Rockwall, and Tarrant Counties. While the prices for single family homes continues to climb to staggering highs; with the highest average being Collin County, coming in at over $600k, up from $462k in 2021, and $386k in 2020. WOW! (please note that March 2022 is the first month of the NTREIS reporting area change, so the data with MLS area information is no longer available for reporting. For more information on the change, visit here: https://www.republictitle.com/ntreis-…)

Our stats infographics include a year over year comparison and area highlights for single family homes and condos broken down by MLS area. We encourage you to share these infographics and video with your sphere.

For more stats information, pdfs and graphics of our stats including detailed information by MLS area and condo stats, visit the Resources section on our website at DFW Area Real Estate Statistics | Republic Title of Texas.

For the full report from the Texas A&M Real Estate Research Center, click here. For NTREIS County reports click here.

Housing-Insight-2021-Annual-Summary

Texas Housing Insight 2021 Annual Summary

by Real Estate ArticlesResourcesStats

The Texas housing market was strong for most of 2021 as mortgage interest rates remained low throughout the year. Sales accelerated, and the average home price increased. Demand remained robust as households desired additional space and better neighborhoods. On the other hand, while new listings increased in 2021, the pace wasn’t enough to keep up with demand, particularly for listings in the lower price cohorts. Housing starts increased drastically in the first half of the year but slowed during the second half due to stubborn supply chain issues and mounting backlogs. In a strenuous and uncertain economy, the housing market was defined by shrinking supply and strong demand, putting upward pressure on the housing market, increasing home prices across the state.

Many of the same factors that defined the 2021 housing market will carry over into the new year, namely constrained inventory, which should maintain elevated price levels despite a slowdown in price growth. Nevertheless, Texas Real Estate Research Center economists expect single-family sales to increase 6.2 percent in January 2022. New variants of the virus present ongoing challenges and uncertainty, but the economic and housing outlook has remained positive. Rising mortgage rates will likely slow sales, but an increasing population and limited inventories should sustain home prices for the foreseeable future.

Supply*

The Texas Residential Construction Cycle (Coincident) Index, which measures current construction activity, increased nationally and within Texas due to strong demand for housing. The Texas Residential Construction Leading Index (RCLI) reached a peak in April with an increase in weighted building permits and residential construction value starts combined with declines in the ten-year real Treasury bill. The trend, however, reverted downward at both the state and major-metropolitan levels, indicating slower activity in the beginning of 2022. Supply-chain issues weighed on construction activity and remain a significant challenge in coming months.

In response to supply shortages and despite the challenges of COVID-19, developers accelerated activity at the earliest stage of the construction cycle. According to Zonda, the number of new vacant developed lots (VDLs) in the Texas Urban Triangle, which encompasses the state’s major Metropolitan Statistical Areas (MSAs), elevated 8.2 percent annually in 2021 to 126,000. Austin led the state with an 18.2 percent increase over the previous year, and Dallas-Fort Worth (DFW) followed with a rise of 13.1 percent. San Antonio VDLs rose 7.9 percent, while the Houston metric increased incrementally by 1.9 percent. While these efforts should ease pressure on the overall housing market, it will take a much larger response to raise supply to meet the demand. 

Strong lot development was matched by a record 173,000 single-family housing construction permits issued in Texas. The statewide metric rose 11.2 percent over the previous year despite soaring lumber and input costs resulting from global supply constraints. Houston and Dallas topped the charts for the year, issuing over 52,100 and 48,400 permits, respectively. Austin and San Antonio both saw strong gains, issuing 24,356 and 13,862 permits, respectively.

Total Texas housing starts began the year with strong growth; however, the pandemic disrupted typical seasonal trends with permit issuance. Lumber prices were elevated in early 2021 and skyrocketed in May. Though prices dropped off somewhat by August, they ended the year 18.6 percent higher than 2020. Regardless, per Zonda, single-family starts in the urban triangle rose 21.2 percent over 2020 due to huge increases for homes slated to sell for $300,000 or more. Starts of homes priced at more than $500,000 surged 94.7 percent over the year. Starts at the low end of the price spectrum ($200,000 and less) decreased 71.9 percent. Limited supply in the lower price cohorts shifted the contribution of sales more toward the higher-priced categories. Construction focused more on high-end homes due to elevated material costs leaving less room for profit in lower-priced categories. All major metros saw double-digit increases in housing starts. San Antonio and DFW sustained strong growth with 29.6 and 28.3 percent increases, respectively, while Austin saw a 22.9 percent surge. Meanwhile, Houston posted a 12.6 percent increase, much lower than the other major metros.

Steady sales and depressed new Multiple Listing Service (MLS) listings pulled Texas’ total months of inventory (MOI) to an average of 1.6 across all price cohorts. A total MOI of around six months is considered a balanced housing market. Houses in the $200,000-$299,999 price cohort fell to one MOI throughout the year, dipping at its lowest to 0.8 MOI. Even homes priced above $500,000 dropped to 2.4 months compared with 2.9 months the previous year as constrained supply at the lower end of the price spectrum pushed buyers toward higher-priced homes. 

Demand

Texas reported 417,050 total housing sales through MLS in 2021, increasing over 6 percent annually. With the robust demand and constrained inventory in the lower price cohorts, more consumers competed for houses priced between $300,000 and $399,000. Sales in this price cohort reached an all-time high, jumping 40.02 percent annually, with the bulk of the increase a result of the second quarter. On the other hand, sales for luxury homes (priced more than $500,000) also broke the record, ascending at double-digits in percentage terms amid the expanded supply.

Houston led the urban triangle in home-sale growth at 11.8 percent. San Antonio and Austin followed with 4.6 percent and 2.5 percent sales growth, respectively. Contrary to the other metros, Dallas and Fort Worth sales balanced after reaching historical highs in 2021 as low inventories limited market activity.

The market share for metros in the Texas Urban Triangle shifted year to year. This percentage split shows how sales in one metro are growing or shrinking compared with other major state metros. In 2021, Houston had the biggest market change with a 2 percent YOY increase, up to 27 percent. The market loss was distributed to Dallas and Fort Worth, which decreased to 18 and 9 percent, respectively. Meanwhile, Austin and San Antonio remained stable at 10 percent market share.

According to the U.S. Census Bureau’s Current Population Survey/Housing Vacancy Survey, homeownership in Texas normalized to 64.2 percent over the year compared with the national rate of 65.5 percent. Homeownership rates decreased annually at the metropolitan level, but were still higher than 2019 values. The rates in Austin and DFW rolled back 3 percent, falling to 62.4 percent and 61.8 percent, respectively. Houston’s metric ticked down to 64.1 percent, while 62.7 percent of San Antonio’s total housing units were owner-occupied. The decreased rate may be because of rising cost of homes across the board coupled with scarce housing options in the lower price categories typically associated with starter homes, leading potential buyers to rent instead.

Amid record-breaking sales activity, Texas’ average days on market (DOM) dropped from 47 days in 2020 to 34 days in 2021. The sellers’ market was hottest in July when the DOM plummeted to 26 days. Corroborating robust housing demand, Dallas and Fort Worth’s DOM sank to 29 and 28 days, respectively. Austin remained the most demanded metro, with homes averaging just 25 days on the market. Demand grew stronger in San Antonio with a 12-day decrease in the DOM, converging with the state average. The Houston DOM remained above the state averagebut still fell to 37 days.

The Federal Reserve is expected to accelerate the tapering of assets purchases and increase the Federal Funds rate at least two to four times in 2022, reflecting rising interest rates. The ten-year U.S. Treasury bond yield ticked up 55 basis points in 2021, averaging 1.5 percent. Meanwhile, the Federal Home Loan Mortgage Corporation’s 30-year fixed-rate fell to 3 percent. Notably, both bond and mortgage rates started rebounding after August, counterbalancing the inflation surge. Mortgage rates for conventional mortgages plummeted below 3 percent within Texas, highlighting a year of unprecedented low levels. Mortgage rates plunged to 3 percent for non-government-sponsored-enterprise (GSE) loans while the median mortgage rate for GSE borrowers diminished to 3.2 percent (GSEs include Fannie Mae and Freddie Mac). Mortgage application counts declined drastically in 2021. During that period, the number of refinance applications shrank 27.1 percent SAAR, while purchase applications shrank by 12.6 percent. Amid the reduced mortgage rate and bolstered home prices, average loan sizes decreased 2.6 percent for refinance applications, and the sizes increased 15.3 percent for purchase applications. (For more information, see Finding a Representative Interest Rate for the Typical Texas Mortgagee.)

Tightened lending standards continued with the strong housing demand. The debt-to-income ratio (DTI) constituting the “typical” Texas non-GSE mortgage decreased to 35.9 in 2021. Relief actions taken by the federal government and lenders helped some households pay off debt and save money. This helped push borrowers’ median credit score to a multidecade high of 749 The median loan-to-value ratio (LTV) dipped to 85.3 percent for non-GSE borrowers, leaving borrowers with a maximized loan value that’s 2.2 percent less with the same home equity value, while the GSE metric flattened at 85.4. The DTI for GSE borrowers, on the other hand, ticked up, inching up from 35.6 to 36.

Prices

Texas’ median home price rose for ten consecutive months, reaching a record-breaking $300,000 and appreciating at an astonishing rate of 15.6 percent annually. All five major metros all hit record-high median prices in the last months. The ongoing shift in the composition of sales toward higher-priced homes due to constrained inventories at the lower end of the market boosted the average and median home price. The share of luxury homes sold in Austin surged, pushing the median price ($450,000) by a notable growth of 30.8 percent YOY. The Dallas metric ($365,000) increased 17.4 percent, while annual price growth in Fort Worth ($309,000) shot up to 18.8 percent. Houston’s ($300,000) and San Antonio’s ($284,900) metrics increased to 15.4 and 14.4 percent, respectively.

The Texas Repeat Sales Home Price Index accounts for compositional price effects and provides a better measure of changes in single-family home values. Compared with December 2020’s 8.3 percent YOY increase. Texas’ index corroborated significant home-price appreciation, accelerating 19.5 percent YOY in 2021. The rate of growth surpassed the surge in the median home price. The repeat sales index also accelerated in all of the major metros. Austin stood above the rest, posting a 34 percent increase YOY. DFW and San Antonio saw their index rise 18.4 and 15.4 percent, respectively. Meanwhile, Houston had the lowest gains but a still strong 12.4 percent. Increasing home prices pressured housing affordability, decreasing Texas affordability advantage compared with past years.

Single-Family Forecast

Texas sales in January 2022 are expected to increase 6.2 percent over December 2021 (Table 1). On the metropolitan level, transactions are expected to drop across the board, but San Antonio is expected to decline the most. Except for Dallas, year-end home sales were greater in 2021 than in 2020.

Household Pulse Survey

According to the U.S. Census Bureau’s Household Pulse Survey, the share of homeowners behind on mortgage payments shrank both at the national and state levels compared with year-ago numbers (Table 2). Remarkably, the portion of Texas homeowners free and clear of a mortgage rose 2.9 percent, corroborating the effect of reduced mortgage rates and a recovered economy. Likewise, homeowners claiming the risk of foreclosure as “not likely” increased significantly from 8.5 percent to 27.5 percent. The proportion of delinquent individuals at risk of foreclosure in the state fell to only 0.3 percent. The Federal Housing Finance Agency’s foreclosure and REO eviction moratoria for properties owned by Fannie Mae and Freddie Mac (the Enterprises) expired Sept. 30, 2021. Continuing the stability and current trend in reducing delinquent homeowners’ mortgage payments is essential to Texas’ economic recovery.

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* All measurements are calculated using seasonally adjusted data, and percentage changes are calculated month over month, unless stated otherwise.

Source – Joshua Roberson, Wesley Miller, Weiling Yan, and John Shaunfield (Apr 6, 2022)

https://www.recenter.tamu.edu/articles/technical-report/Texas-Housing-Insight

The-Most-Overlooked-Paragraph

Paragraph 12: The Most Overlooked Paragraph in the TREC 1-4 Contract

by Real Estate ArticlesResourcesVideo

At closing, a seller or a buyer might be caught off guard by all the fees that are not part of the sales price but they are part of the contract.  It is important to set your clients expectations from the beginning of the transaction and highlight the additional fees they will likely incur at closing. 

There is often a lot of confusion about the owner title policy and the loan title policy.  When paragraph 6 reflects that the seller will pay for the owner title policy, the buyer might show concern when they see all these title charges on their closing disclosure or settlement statement.  It is their understanding that the seller is paying for the title charges.  Well these title charges, however, are actually reflected in the contract which the buyer has presumably read, understood, and agreed to.  In Paragraph 12, the buyer has agreed to pay for the loan policy with all the endorsements required by the lender along with other charges and fees most of which are lender fees.  Paragraph 12 also informs the seller of their obligation to pay for releases of existing liens, possible prepayment penalties, recording fees, release of seller’s loan liability, tax statement certificates, preparation of the deed, and one half of the escrow fee and other expenses that the seller is obligated to pay under the contract. 

Remember when you sit down with your clients and you’re about to accept or make an offer, point out paragraph 12 to inform them about the additional expenses.

 

April-Gardening-Tips

April Landscape & Gardening Tips & To-Dos

by Real Estate ArticlesResources

Need help planting a successful garden or landscape? Here are some April planting tips from the Dallas Arboretum horticulture staff and the Dallas County Master Gardeners that can help keep your home garden looking beautiful this Spring. Plant care should be your focus in April. 

  • Begin planting summer annuals, such as lantana and pentas (sun) and begonias and coleus (shade), as they become available at local nurseries. Some summer tropicals may also be found in nurseries toward the end of April
  • Now is great time to plant new perennials in your garden. Make sure to select plants that are right for your zone. Consult nursery professionals if you are uncertain.
  • Continue planting new trees and shrubs. Don’t forget to fertilize new plantings.
  • All summer veggies and herbs can be planted this month.
  • Continue sodding and seeding lawns. As the temperatures warm, make sure sod stays moist until it begins to root out.
  • Continue any tree and shrub pruning to reshape old and new growth.
  • Continue pruning and reshaping any spring blooming shrubs and vines after they finish flowering.
  • Continue fertilizing lawns and prepare to start mowing if you haven’t already.
Blog Graphic

February 2022 DFW Area Real Estate Stats

by Real Estate ArticlesResourcesStatsVideo

February stats are here and we have the numbers! 

Our stats infographics include a year over year comparison and area highlights for single family homes and condos broken down by MLS area. We encourage you to share these infographics and video with your sphere.

For more stats information, pdfs and graphics of our stats including detailed information by MLS area and condo stats, visit the Resources section on our website at DFW Area Real Estate Statistics | Republic Title of Texas.

For the full report from the Texas A&M Real Estate Research Center, click here. For NTREIS County reports click here.