HOUSTON – (By Michelle Leigh Smith for Realty News Report) – With almost 9,000 homes sold, July was the best month ever in Houston real estate history, the Houston Association of Realtors reported.
The association reported 8,953 single-family homes were sold in July. That shattered the previous record month – July of 2018 when 8,385 houses were sold.
“Real estate sales are on the rise like never before,” says Realtor Jeff Walters with Save 1900 Realty and Virginia Malone & Associates. “We closed a deal this year with a 19-year-old young man and his 18-year-old girlfriend. These kids had saved a 20 percent down payment and still had money in the bank.”
The July surge in sales was attributed to lower mortgage rates and a more plentiful supply of homes for sale – following a period when inventory was so thin that buyers had trouble locating homes they wanted.
At the end of July, the Federal Reserve cut interest rates for the first time in more than a decade. With the economy under global pressure, analysts expect another cut in September, perhaps even a half-point decrease.
“Buyers have been waiting for the Fed’s announcement with many not aware mortgage rates are normally not determined by short term rates,” says Frank Ferrara, Senior Loan Officer with Republic State Mortgage.
The falling interest rates make buying a house more affordable.
Every quarter-point cut in mortgage rates is equivalent to a 3 percent drop in the price of a home, housing analyst Ivy Zelman of Zelman & Associates told CNBC on Wednesday.
“Jumbo loans are around 3.875-4 percent and conforming loans are between 3.625-3.75 percent,” says Rhine McNeill, a top producer at Carnan Properties. “”There has been a steady increase in loan activity over the last few months, and the market activity has been brisk in certain price points, particularly the $250,000-$700,000 range.”
The Houston Realtors Association reported homes in the $500,000 to $750,000 range staged the biggest sales gains, up 22.0 percent versus July 2018. Next were homes in the $250,000 to $500,000 range, which rose 16.9 percent. The luxury segment, which consists of homes priced at $750,000 and above, increased 5.3 percent.
The median price of a single-family home (the figure at which half of the homes sold for more and half sold for less) reached the highest level ever for a July, climbing 2.2 percent to $250,000, HAR reported.
The huge sales total in July represented an 11.6 percent gain over last year.
John Marshall, an agent with Roger Martin Properties, says, “I see younger buyers responding to lower interest rates because it makes mortgages cheaper than a rent payment. Sales are very strong in Sharpstown, especially for fixer-uppers. People are buying low, investing in upgrades and making a nice profit.”
Gail Nash with Keller Williams reports, “I have finally had some open house activity…I’m going to do it again this Sunday. People out looking seem motivated!! What a switch from pre-July 4 traffic! Maybe it’s just the buzz about the rates, even if they don’t go anywhere.”
“The lower interest rates will definitely open the market for selling as well as refinancing,” says Realtor Jeff Walters. “I think it is a good thing for our city and the country’s economy.”
The boom in Houston home sales should remain in place in August, maybe a little longer. Pending home sales were up 19 percent in July, over July of 2018, HAR said.
Houston Realtors are selling homes at a record-setting pace that is on track to make 2019 the strongest year ever for sales. Year-to-date, home sales are running 3 percent ahead of last year’s pace.
Said HAR Chair Shannon Cobb Evans with Heritage Texas Properties: “We believe that the Houston real estate market is on track for another record year, and that is directly attributed to a healthy local economy, low mortgage interest rates and an improving supply of homes.”
Aug. 5, 2019 Realty News Report Copyright 2019
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