In the past 16 years , Texas has continually outperformed the national average for job growth. Often Texas is double the national average. That job growth is likely to continue through 2014. Texas has added over 459,000 jobs since January 2012.
Mortgage rates are increasing, but they are still ridiculously cheap. In the late 1970s, we thought 8 percent was cheap. Five percent was unheard of. Now the media is gnashing its teeth that higher mortgage rates will derail the housing recovery.
Right now, Fannie and Freddie are almost 100 percent of the mortgage market. When the Fed stops buying all the mortgages in America, it’s possible that rates will increase. However, take a look at jumbo mortgage rates for evidence. The Fed is not buying jumbo mortgages. The market is determining those rates, just like a free market is supposed to do. The current rate on jumbo loans is essentially the same rate as 30-year conventional loans. Jumbos historically have been viewed as riskier loans than conventional mortgages. So when the Fed stops buying mortgages, expect the rates for 30-year mortgage loans to approach those for jumbos.
Looking forward to 2014, the housing market in Texas most likely will be hot. Home builders will not be able to build homes fast enough to meet the demand. Developers won’t be able to supply lots to meet demand. Hence, prices are likely to continue to move up. Higher prices spur more buyer demand. Transaction volume will most likely increase as well.
In 2012, most would've suggested that real estate professionals not take a vacation until after Labor Day. Well now, if you are a real estate professional in Texas, you shouldn't take a vacation at all in 2014.
Things are shaping up to be a good year!
Originally written by Mark Dotzour