Houston, TX Mortgage Update

What a year it has been for the real estate and mortgage industry both nationwide and locally here in Houston, TX.  While mortgage rates are pretty much for the most part set nationally, real estate prices are definitely tied to the local market. In this case Houston, TX has benefited with low mortgage rates with the rest of the nation. Where we differ is in the current state of our real estate market. As the saying goes, “Thank your lucky stars you are in Texas”, specifically Houston, TX.

Right now there is not a better place to be in my opinion than Houston, TX. Here is a short-list of reasons:

We were the last to enter a recession, the first out of a recession while the rest of the nation is mired in it, real estate prices are stable, we have led the nation in job-growth, mortgage rates are fantastic, and we are in the best state with regards to regulation with a pro-business environment.

While nationally home prices continue to fall even with all-time low mortgage rates we have enjoyed stable and in some areas rising home prices. If you live in Houston, TX it is the perfect time to purchase a home. Never in history have we enjoyed such housing affordability/stability with such low mortgage rates. The shortage of multi-family housing in Houston, TX has caused rents to rise furthering the advantage of home-ownership in Houston, TX.

One of the things that has changed with regards to what type of mortgage you may want to finance a home in Houston, TX. Until recently adjustable ate mortgages have had a significant advantage over fixed rate products for those that knew they would be in a home less than five, seven, or ten years. The difference in the mortgage rate for an aadjustable rate mortgage versus a fixed rate mortgage in Houston, TX was anywhere from one percent to two percent lower. That was a huge savings on your mortgage payment.

Recently the Federal Reserve Bank created what is called a “Twist”. In effect they sold their short-term interest-rate products in order to raise money to buy their own long-term interest-rate products. The hope of the Federal Reserve Bank is that they can drive down long-term mortgage rates even further to kick-start the national economy.

Now adjustable rate mortgages for conforming mortgage products don’t have a significantly lower rate than fixed rate mortgages. On the other hand, the adjustable rate products in the jumbo mortgage market and super-jumbo mortgage market do have quite a bit lower rate than their long-term mortgage counterparts.

For now our advice when buying a home in Houston, TX is to use a fixed rate mortgage for conforming mortgage loan sizes and use adjustable rate mortgage products if needing a jumbo mortgage or super-jumbo mortgage.



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