Lingo You Should Know

Lingo You Should Know

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.

What-To-Do-With-Smart-Home-Devices

What To Do With Smart Home Devices

In today’s high tech world, many homes are equipped with the latest smart home technology and security devices. As a real estate agent, it is important to be in the know on how the TREC Contract addresses security devices in the home. Listen in as Republic Title’s Janet Allen and Scott Rooker discuss:

  • What does the TREC Contract tell us about security devices?
  • What does the seller need to do if they are leaving security systems and devices in the house that are controlled by app or phone?
  • What should I expect at closing if I am buying a home with security devices?
  • How is a buyer able to access and operate smart devices in their new home?

For more information, go to Blog for videos like this and other helpful information. Blog | REPUBLIC TITLE

Best Patios for Al Fresco Dining

Best Patios for Al Fresco Dining in DFW

Great food, good drinks and gorgeous weather call for al fresco dining! With spring in full bloom, it’s the perfect time to get out and dine at some of our favorite patio restaurants in DFW!  Check out our top spots from McKinney to Fort Worth. What’s your favorite patio restaurant in DFW?

The this and more DFW area information, head to our resources page: DFW Area Helpful Resources | Republic Title of Texas

Housing-Insight-January-2022-Summary

Texas Housing Insight January 2022 Summary

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

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.
Class-Calendar-Blog-Header

May Class Calendar

Republic Title is pleased to offer a variety of continuing education classes for our customers. Join us in March for classes including:

LIVE Listing Presentations using Cloud CMA
With Cloud CMA Live you can command the room (whether it’s in person or on the computer) with confidence by creating virtual listing presentations your clients will love! This class will show you how Cloud CMA Live will help you make a great impression with your clients, easily establish yourself as the neighborhood expert, and win more listings (virtually)!
May 3rd
10:00 am – 11:00 am
Zoom

Home Surveillance – Legal Issues
Join us for this class which focuses on the specifics of home surveillance and potential legal issues that arise from unlawful recordings of video or audio or both when an agent is showing a house or listing a house.
May 4th
10:00 am – 11:00 am
Zoom

TREC Legal Update II
Material mandated by TREC – Ethics/Fair Housing/Anti-Discrimination/Hot Topics/Court Cases.
May 10th
10:00 am – 2:00 pm
Republic Title Uptown

Digital Delivery with Docusign®
DocuSign® makes it easy to streamline your business and go paperless. This hands-on class covers the basics of DocuSign®, showing you how to easily sign and send documents from anywhere.
May 11th
10:00 am – 12:00 pm
Zoom

Target Professionals using LinkedIn
With nearly 700 million members across the world, LinkedIn has changed the way professionals connect with their colleagues and network for business. With one in three professionals active on LinkedIn, you are sure to engage in meaningful business connections and generate leads when you use LinkedIn. Join us to learn how to become a proficient user, how to grow your connections and how to leverage LinkedIn in your real estate business.
May 17th
10:00 am – 12:00 pm
Republic Title Southlake

The Ins and Outs of the Residence Homestead Tax Exemption
The objective of this course is to provide a complete understanding of the homestead tax exemption. The class will cover: how the homestead exemption impacts the value of property for the calculation of property taxes; how and when to apply for the homestead exemption; the impactions of the over-65/disabled persons exemption on property taxes; how to transfer the over-65/disabled persons exemption when moving homesteads; and how the homestead exemption is used when located with agricultural property.
May 17th
10:00 am – 11:00 am
Republic Title Prosper

Top Ten Contract Addenda
Join us to review 10 of the most commonly utilized TREC contract addenda including Third Party Financing Addendum, Addendum for Backup Contract and more.
May 24th
10:00 am – 11:00 am
Zoom

Triple Your Repeat & Referral Business
The goal of this course, provided bay Darian Rausch, is to provide real estate professionals with the information needed to build their repeat and referral business by building trust in customers, clients, and fellow agents. Agents will learn how to work leads to generate more leads, transition from passively accepting occasional referrals to a pro-active referral mind set, and make the connection between their “brand” and referral success.
May 24th
1:00 pm – 3:00 pm
Zoom

To see a current list of available classes and to register, please visit www.republictitle.com/residential-education.

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March 2022 DFW Area Real Estate Stats

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

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.

________________

* 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