Home Equity Hits $18 Trillion — What That Means for You
American homeowners have never had more wealth. Home equity just hit a record $18 trillion. That’s according to a new report from Intercontinental Exchange. So what does that mean for the Houston housing market? Annual home price growth rose to 1.5% in July. That is the fastest pace in over three years. About 47.5 million borrowers now have $212,000 in tappable equity on average. That is a lot of cash homeowners can use.
But there is a downside too. Delinquencies and foreclosures are rising. The foreclosure rate hit 0.53%. That is a six-year high. Texas and Florida make up 39% of underwater homes. So Houston homeowners with equity are in a good spot. But those who bought recently may feel more stress. The picture is mixed right now. If you have equity, you have options. If you are buying now, you need to pick your moves wisely. For first-time buyers, rising foreclosures could mean more inventory. That may help you find a home. But it also means you need to be careful. Work with a lender who knows the local market.
What do these trends mean for local buyers? Let’s look at mortgage rates next.
Mortgage Spreads Keep Rates Under 7% for Now
Mortgage rates are sitting near 6.74% right now. That might seem high. But they could be much worse. According to an analysis by HousingWire’s Logan Mohtashami, rates would hit 7.84% with 2023 spreads. They would be 7.46% with 2024 spreads. So spreads are helping keep the Houston housing market moving.
What are mortgage spreads? They are the gap between mortgage rates and Treasury yields. When spreads are tight, rates stay lower. In 2023, they blew out to over 3%. That pushed rates to 8%. Now they are at 2.01%. That is much better for buyers. The Iran conflict is keeping bond yields high. That puts upward pressure on rates. If a deal happens, rates could fall. If not, they may stay near 7%.
Still, sales slow down when rates go above 6.64%. We are already seeing that. Purchase applications have slowed. But the housing market is not collapsing. It is just cooling off. For Houston buyers, this means you still have time. Rates under 7% are not a bad deal compared to recent years. Check current Houston mortgage rates to see what you can lock in today. Either way, locking a rate now gives you peace of mind.
Now let’s see how these national trends show up here in Houston.
Houston’s Luxury Market Shows Strength in Sherwood Forest
A stunning home in Houston’s Sherwood Forest area just sold for top dollar. The 7,241-square-foot property sits on a gated 1-acre lot. It has a pool, a covered patio, and a remodeled wing. That is a big sale for the neighborhood. It shows that high-end buyers are still active in the Houston housing market. According to the Houston Business Journal, this was one of the priciest sales that week.
Luxury homes are not the whole story. But they tell us something. Buyers with means are still putting money into Houston real estate. That is good news for the whole market. Inventory is still tight in many areas. But more homes are coming on the market each month. That gives buyers more choices. Communities like Katy and Cypress see steady demand for family homes. If you are a first-time buyer, do not let luxury sales scare you. There are homes at every price point here. Bayway Mortgage can help you find the right loan for your budget.
Speaking of builders, let’s look at how homebuilders are changing their game in Texas.
M/I Homes Expands in Texas with Efficient Building Methods
Homebuilder M/I Homes is growing fast in Texas. The company now runs about 60% of its business in the South. That includes Texas markets like Houston and San Antonio. They use simple designs called “box-on-box” homes. These homes cost less to build. They pass those savings to buyers. According to a HousingWire analysis by Scott Finfer, this strategy helps keep home prices lower.
What does that mean for you? More affordable homes could come to the Houston housing market. Builders are finding ways to cut costs without cutting quality. New homes in Sugar Land and Pearland may become more affordable. That is good news for first-time buyers. Affordable new construction homes are a great option. They often come with builder incentives too. That can help with closing costs or rate buy-downs. If you are looking for a new build, now is a good time to explore your options. You can check out first-time buyer resources at Bayway Mortgage to get started.
Now for a fun fact about living in Houston.
Fun Fact: Houston’s Restaurant Scene Keeps Growing
Did you know Houston has over 10,000 restaurants? That is more per person than any other U.S. city. The Houston housing market is not the only thing growing here. New spots keep opening across the metro area. From The Woodlands to Katy to Sugar Land, there is always something new to try. Houston’s food scene is one of the best in the country. So get out there and enjoy a meal with friends and family. Life in the Houston area is pretty good.
