Building, purchasing, or refinancing a house can be quite stressful, as most people who have done so would agree. It also can be quite satisfying, especially once you move in and get settled. I have been involved in this process for quite some time, and I look forward to moving day in the not-to-distant future.
Over the past few years, home ownership in the US and Texas has been rising. Currently, nearly two-thirds of the state’s residents own a home. In 2003, a total of 123,848 single-family housing permits were issued in the Lone Star State. The average cost of these dwellings was about $130,700, which was $3,700 more than the previous year.
There were also 213,266 existing houses that were sold by Texas real estate agents in 2003. This amount represents a 6.5% increase over the number of homes sold in 2002.
Prices for existing homes ranged from under $30,000 to several million dollars. Some 24.7% of the houses were purchased for a price between $100,000 and $120,000. Another 26.1% spent between $50,000 and $100,000. About 8.4% of those who bought existing houses paid more than $300,000.
The aggregate dollar value of these houses was $34.09 billion. It took almost six months on average for each of these residences to be selected, prices agreed upon by buyers and sellers, and the necessary processing to be completed.
In January 2004, there were approximately 106,150 houses on the market across the state, about 4.8% more than were available for the same month last year. Nearly 11,900 of these dwellings were sold in January at an average price of $150,800.
In Texas, the median price of a single-family home last year was $127,900. It is currently estimated that about 54% of Texans have sufficient income and available funds for a down payment to be able to afford a median-priced home, based on a 30-year mortgage.
Nationwide, the median price is expected to rise about 4.6% this year. As the economy continues to expand and job growth improves, household incomes will climb, adding fuel to the desire and affordability of many families for a new house.
In some areas of Texas, there is the potential that demand could outpace the supply of homes available for sale. Such a situation might drive prices up, which in turn could reduce the capacity of middle-income families to purchase their first choice in homes.
For those who own houses, refinancing remains attractive. Mortgage rates continue to hover around 6%, some even dropping to near 5%, depending on the length of the loan. During the first week of this month, weekly mortgage activity pace picked up 1.2%, and the requests for loans to buy new homes climbed 1.4%.
With the Fed’s recent decision to keep interest rates at their 45-year lows, at least for a while, owning a home or upgrading to a better one remains of great interest. Many real estate specialists are predicting that March will be a banner month for mortgage lending. Repeat homebuyers are expected to be a prime moving force as they roll their equity gains on the sale of their current residences into subsequent home purchases, which usually will be at higher prices.