Home sales stressed by high mortgage rates and prices
High prices and interest rates hinder buying homes
Skyrocketing prices and high-interest rates continue to pose challenges for homebuyers, with the National Association of Realtors reporting record-low 'pending home sales.' Fox 26 Business Reporter Tom Zizka, live on Braes Valley in Southwest Houston, highlights the ongoing difficulties for both buyers and sellers, suggesting relief may not be imminent.
HOUSTON - Expensive prices and high interest rates are still making it difficult to buy a home. The National Association of Realtors says 'pending home sales' are the lowest they've ever recorded. They are a measure of signed contracts on existing homes, and offer an immediate indicator of housing demand. Year-over-year, nationally, pending sales are down 8.5%.
Drive though Houston's residential streets, and you won't see a lot of For Sale signs. Existing home inventory is at a four-year low, and those that are available have a median price of about $345,000. For would-be buyers, the economics can be challenging.
Valerie Tulloch-Cramer is looking for something a little smaller for her family. "I can afford to wait. But while I'm waiting, the prices are continuing to go up," she says. "The things that are sort-of affordable are snatched up so quickly, it just moves faster than I can."
Houston realtor Tim Surratt says every one of his clients who is looking to buy has expressed some frustration, "You have to earn about 16% more this year, than last year, to buy the average-price home in Houston. That's a lot."
While median prices have dropped about 1% in the last year, and mortgage rates have slipped from their recent highs, the cost of a 30-year mortgage is still above 6.5%. That means, locally, the minimum annual income needed to buy a median-priced home is more than $104,000, which only includes about a third of Houston-area households. realtors say there just aren't many bargains to be found.
"Obviously, we're not the cheapest place to live, which brought a lot of people to Houston to live over the years," says Surratt, "But we're still cheaper than Dallas, or Austin, maybe not San Antonio, but of the other major cities, we're still the most affordable city to be in."
Locally, October home-sales were down more than 3%, which bucks the national trend. However, the Houston Association of Realtors says the only segments seeing an 'increase' in sales are homes below $150,000 and above $1 million. Everything else, in-between, is proving a difficult deal to find.