With mortgage rates remaining high, home sales in Texas have continued to fall in November of 2022, leading to fears that the housing market may not be as strong as it once was.
However, there are some strong reasons why sales will increase in early 2023.
Let's dive right in.
1.Past Home Sales Reports Look Back, So Lag Time Confuses Things
The data usually provided for home sales in Texas often looks back. That is, the reports tend to be from one or two months prior to the time of release.
As such, it takes a bit of time for recent changes in demand and market conditions to show up in the statistics. This lag time may make it appear that more doom and gloom is in store, but in reality we may already have found the bottom.
A great way to understand this is by using our real estate roller coaster metaphor:
Imagine a roller coaster moving up and over the top of the loop. As you go up the coaster, it looks to the riders in the back like the top is still far off. Meanwhile, the riders at the front are already over the crest, and coming down with speed.
In other words, past home sales reports give you data today, for yesterday's news - like the riders in the back.
Wouldn't you rather be a front row rider enjoying some of the best housing prices and concessions we have seen in over 2 years?
2. Lower Construction Costs for New Homes
The cost of constructing new homes has dropped significantly and is expected to remain lower in the coming months.
According to the Housing Market Index (HMI) from the National Association of Homebuilders (NAHB), builder confidence is rising in their six month outlook.
What this means for buyers is that they can find more quality new homes at lower prices. This should help entice more people to enter the market in 2023 and get pre approved for loans like the Texas conventional home loan - giving a much needed boost for home sales in Texas.
3.Better Financing Opportunities
With interest rates finally coming down and providing just a little bit of relief for buyers, we are seeing more homebuyers "date the rate, marry the home."
Some of the better refinancing opportunities we're seeing include fixed rates, adjustable rates and even no closing cost mortgages.
These homebuyer friendly financing options are helping to make it much easier for people to buy a new home in Texas - which could be another factor that boosts sales in 2023.
In addition, because sellers are more motivated to sell, buyers are getting large concessions which they can use a credit for the down payment, closing costs, or even upgrades in their new home.
These concessions in some cases can cover the full down payment - resulting in $0 down payment from the buyer!