Whether you’re ready to buy your first home or invest in real estate, this is a big decision that shouldn’t be taken lightly. After all, buying real estate will put a dent in your budget. Thus, you must be sure you can afford it and that it is the best option for you. Furthermore, you should also determine if this is the right time to make such an investment. Not considering all these aspects can end up ruining you. To help you in your endeavor, we’ve compiled this guide to the future of the Texas real estate market: trends to watch.
No. 1 Home prices are the first stop in our guide to the future of the Texas real estate market: Trends to Watch
If you’re planning to buy real estate in Texas, the first thing you have to research is home prices. According to the existing data, home prices reached an ultimate high in July last year. However, since then, the prices have started to drop. Specialists predict this trend will continue well into 2023 and stabilize in summer.
This is good news for first-time homebuyers because it will make homes more affordable. Experts predict that home prices will drop by 5% nationally, a significant reduction. Furthermore, this also benefits current homeowners. Because even though prices will drop, they will remain higher than in the pre-pandemic period. This, in turn, gives homeowners enough time to build equity.
No. 2 Mortgage Rates
The future of mortgage rates is a bit uncertain because it all depends on what will happen with inflation. As we witnessed in 2022, mortgage rates have risen dramatically as a result of the rising inflation. Thus, if this trend continues in 2023, we shouldn’t expect to see a drop in mortgage rates.
Nevertheless, experts are slightly optimistic. They forecast a slight drop from 7% to 6% until the end of this year. Unfortunately, this isn’t very helpful for buyers as it won’t reduce their monthly mortgage payments much. As a result, buying real estate will still be hard to afford for many.
No. 3 Home Sales
Home sales are another important aspect in our guide to the future of the Texas real estate market: trends to watch. The 2022 rise in inflation and mortgage rates, has made homebuying less affordable. As a result, demand has decreased and will likely continue to do so in 2023. The upside here is that if you’re planning to buy, you’ll face less competition.
Now, specialists predict that home sales will drop by 16% compared to last year. Given this significant decrease, you should also expect a decrease in the supply. Because rather than accepting offers below market value, homeowners prefer to hold on to their properties and rent them out. After all, owning a home is a powerful financial decision that gives you lots of options even during hard times.
No. 4 New Construction
The current Texas real estate conditions have determined builders to cut back on starting new projects. Their main goal is to finish ongoing constructions and sell them to the people they signed contracts with last year. As for those that haven’t been contracted yet, they will either be sold to real estate investors or will be transformed into rentals.
At the same time, builders will probably focus more on building new smaller-sized homes rather than single-family homes. The main reason for this is that smaller homes are more affordable. As a result, the demand will be higher.
No. 5 Building Permits
It’s not just the number of new construction starts that is expected to drop, but also the number of residential building permits. Because of the uncertainty of this year’s real estate market, both builders and developers will likely put new projects on pause for the moment. Experts predict they will get rid of unwanted land, lower the prices of unsold homes to find buyers, and even merge with smaller competitors to sustain their businesses.
No. 6 Availability of Rentals
Since most people won’t be able to afford to buy homes, they will set their eyes on renting. This means that the demand for rentals will be high and the competition more fierce. Still, this doesn’t necessarily mean that the availability of rentals will be low. As previously mentioned, specialists forecast that homeowners, builders, and developers will be more interested in renting rather than selling in 2023. As a result, there the number of available rental units will increase.
No. 7 Rental Prices
In the previous two years, rental prices have increased significantly. Nevertheless, we’ve noticed a flattening of rents in recent months. Experts predict this trend will continue at least until the middle of 2023 due to the rise in the number of available rental units. Still, some forecasts show that prices will increase once again in the second part of the year.
Consult with Experts
While you can research the Texas real estate market trends on your own, it’s best to consult with experts. These professionals know what is going on and can give sound advice. Firstly, you should contact a mortgage broker to identify the types of loans you could apply for. This will help you determine if you can afford to buy real estate or should stick to renting.
Secondly, you should consult with a real estate agent. These experts know everything about the Texas real estate market and can provide beneficial information. Not to mention that they can help you find the perfect property regardless of whether you decide to buy or rent.
Thirdly, hiring interstate movers is a must if you’re planning on moving from Nevada to Texas. Reach out to specialists to help you plan a stress-free relocation. They can take care of everything from packing and unpacking your belongings to safely transporting them to your new home.
Final thoughts
You should never make rash decisions when it comes to buying real estate. This is a big investment, so you should take your time to carefully assess your options. Moreover, you should do some research on the current real estate market conditions, as well as expert predictions for the future. This guide to the future of the Texas real estate market: trends to watch lists some of the most important aspects you should consider. Still, you must remember that the future remains uncertain, and not every forecast will come to be.