Hi neighbor,
Today I will be sharing with you our perspective on the local real estate market here in Houston, Texas, specifically a market update for the neighborhood of 77070. Whether you are looking to buy, sell, or just keep an eye on the market, we look forward to being your resource.
What is happening in the real estate market in 77070?
We currently have 10 homes pending, with 2 homes sold in the last two weeks, averaging a sale price of $123 a square foot. Two homes sold over the asking price.
Compared to the two weeks prior: Homes sold are slightly down from 3 sold, but the average sales price is up to $425,000 ($417,000 previously). Every home is different, with different features, so don’t forget to ask us for your annual equity review if you are curious about your personal home. You can text AER to 79564 or email us here.
If we look at how fast the move-in-ready (modern) homes are going (must not be overpriced), the demand in this area has not surpassed the supply, making it still a great time to sell. Buyer agents around Houston are seeing a slow in the real estate market, but it isn’t affecting every neighborhood. I know the interest rates rising has been one deterrent from some buyers purchasing right now, but that isn’t your ideal buyer anyways!
The most desirable homes in the area are still selling the first weekend or first week they hit the market (a really good coming soon campaign, like we do at Jo & Co. allows you to sell faster, for more money).
Check out the graphic below for a larger overview of the real estate market for the last two weeks in 77070.
What I have gathered…
Dual Inflation Rates
Last week, the Consumer Price Index (CPI) for August saw a 0.6% monthly increase, pushing the annual rate to 3.7%—both figures exceeding predictions. The monthly jump was the most significant for the year, largely fueled by rising energy costs. Oil prices jumped almost 11% during August, as the cost per barrel rose from $65 to $89 between June and September.
On the other hand, the Core CPI—which omits food and energy costs and is more keenly observed by the Federal Reserve—fell from 4.7% to 4.3% year-over-year, showing signs of moving in a favorable direction.
Following the release of this news, the 10-year Treasury Note yield retreated from 4.35% to 4.25%, indicating that the bond market and interest rates found the Core CPI decline encouraging.
Peaks in 2023 Oil Prices
As stated, the primary driver for August's inflation uptick was the surge in oil prices, which have continued to climb, reaching new highs for 2023 last week. If this trend persists, we can anticipate that the CPI for September will also reflect elevated headline inflation, confirming that inflation reached its nadir in June.
The Silent Phase Persists
As the Federal Reserve's upcoming meeting looms, its officials are refraining from public comments on monetary policy. This period of quietude has helped to stabilize interest rate fluctuations and maintain rates below 2023 highs. Expect changes in the week ahead.
Presently, Fed Fund Futures, which gauge the likelihood of interest rate adjustments, predict an almost certain chance of no rate hike during this meeting.
Rising Rates in Japan
Global interest rates have been ticking upward, and Japan has followed suit. With inflation hitting four-decade highs in the country, Japan's Central Bank has permitted their 10-year government bond yield to reach 0.7%, the highest since 2014. If this trend continues, it could exert upward pressure on worldwide yields, including the U.S. 10-year Note.
The Bottom Line
Interest rates are near their yearly highs, and there's a potential for accelerating headline inflation, particularly due to energy costs. Monitoring this will be crucial in the coming months, as any uptick in inflation could compel the Fed to further raise rates.
Looking Ahead
This Wednesday, the Federal Reserve will disclose its Monetary Policy Statement and interest rate decisions. Prior to the silent phase, several Fed members emphasized the need for “patience” and a likely “pause” in further hikes, pending economic developments. Market sentiment suggests no rate hike this week and a 50/50 likelihood of one in November.
Mortgage Market Outlook
Mortgage bond prices set the stage for home loan rates. The accompanying one-year chart showcases the Fannie Mae 30-year 6.0% coupon, which serves as the basis for currently closed loans. Rising prices correlate with lower rates and vice versa.
The chart indicates attempts to stabilize above the lowest prices of 2023, which could lead to additional improvement in rates if sustained. Nevertheless, if bond prices dip below $99, we may see another uptick in home loan rates.
Chart: Fannie Mae 30-Year 6.0% Coupon (Friday, September 15, 2023)
What is happening in the real estate market nationally?
Last week, mortgage rates trended higher. The housing market sentiment index declined in September. Building permits jumped in August while housing starts dipped. Mortgage application submissions climbed on both the purchase and refinance index. The Fed kept the benchmark interest as is. Continuing and initial jobless claims fell. Existing home sales decreased slightly in August.
| MORTGAGE RATES CURRENTLY TRENDING | THIS WEEK'S POTENTIAL VOLATILITY |
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Notable News
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Market Recap
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The National Association of Home Builders’ (NAHB) housing market sentiment index declined to a level of 45 in September, dropping below the expected reading of 50.
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Building permits soared in August, jumping 6.9% month-over-month – an increase from July’s 0.1% rise.
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Housing starts tumbled down 11.3% month-over-month in August, a sharp decline from July’s 2.0% climb.
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Mortgage application submissions jumped a composite 5.4% during the week ending 9/15. The Refinance Index surged 13% while the seasonally adjusted Purchase Index inched up 2% from the week prior.
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As expected, the Federal Open Market Committee (FOMC) to keep the benchmark interest rate unchanged at 5.25%-5.50%. The Fed continues reducing its holdings of U.S. Treasury securities, agency debt, and agency mortgage-backed securities.
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Continuing jobless were at a level of 1,662,000 during the week ending 9/9, a decline of 21,000 from the week before. During the week ending 9/16, initial jobless claims were at a level of 201,000, a decline of 20,000 from the week prior.
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Existing home sales dipped 0.7% month-over-month in August, showing a slower decline than July’s 2.2% drop.
Review of Last Week
POWELL DISAPPOINTS… The Fed paused its rate hikes last week, but Chair Powell made it clear rate cuts were not coming any time soon. This pushed bond yields up, which sent stocks down for another week.
Wall Street thought the Fed would start cutting rates soon, but Powell nixed that, saying there could be another hike this year, rates may stay higher for longer, and there could be smaller cuts than expected in 2024.
Initial and continuing jobless claims were the lowest since January, and the huge services sector remains in expansion mode. Problem is, the strong labor market and economy are helping keep inflation well above the Fed’s 2% target.
The week ended with the Dow down 1.9%, to 33,964; the S&P 500 down 2.9%, to 4,320; and the Nasdaq down 3.6%, to 13,212.
Bond prices also dropped, pushing yields up. The 30-Year UMBS 6.0% fell 0.27, to $99.02. The national average 30-year fixed mortgage rate inched up by a miniscule amount in Freddie Mac's Primary Mortgage Market Survey. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.
DID YOU KNOW… Realtor.com says the first week in October will likely be the best week for homebuyers this year. They can typically expect lower than peak level prices, less competition, and more inventory than in the summer months.
Market Forecast
NEW AND PENDING HOME SALES, HOME PRICES, INFLATION… Three major housing reports should show an August dip in both New Home Sales and the Pending Home Sales index of signed contracts on existing homes, but a small rise in the July S&P Case-Shiller Home Price Index. Analysts expect a slight monthly gain in August PCE Prices, the Fed's favorite inflation gauge.
Summary
Sales of existing homes dipped a tiny 0.7% in August, the third straight month of declines. Tight inventory is the culprit, both hurting sales and nudging the median price up modestly, now 3.9% ahead of a year ago.
Housing starts sank 11.3% in August, mostly due to a 26.3% drop in multi-units. Single-family starts are actually up 2.4% the past year, as more buyers turn to new builds. And permits posted a gain, so the future looks good.
Buyer demand continues. The Mortgage Bankers Association reports purchase loan applications rose last week a seasonally adjusted 2.0% versus the week before, the second week in a row of increased mortgage applications.
Can we sell yours?
So if you are in need of a listing agent, we would love the opportunity to see your home and meet you of course. My husband, Edward, and I, look forward to being the brokerage and team for you! You can reach out to us via email: [email protected] & [email protected] or telephone: 832-493-6685.
Read more:
If you are curious ‘How to get more money for your home when listing it for sale', check out this blog post.
I hope you have found this blog post super helpful. If there is anything else we can do for you, including helping you sell (or buy) a home, I would be honored to assist. I hope you have a great day/evening. Cheers, E + J.
We are so happy you found our little corner of the interwebs. We look forward to y'all reaching out to us. We love to answer questions and welcome them. Recently we created some local maps, and you can download those by clicking the image/link above. Below, you will find an index of some very helpful information to assist you in learning more about the Houston suburbs. If you are relocating to our neck of the woods, we hope you reach out to us, because we would love to help you by being your local realtor and friend. Thoughtfully written for you. Hugs, Jo.
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If you are overwhelmed..
Now if you are feeling overwhelmed on where you should plant your roots, I would love to talk to you. You can schedule a call with me by click this link: http://byjoandco.com/call or just send us an email: [email protected]. There are some amazing communities all over the Houston suburbs. In this post, https://search.byjoandco.com/blog/best-neighborhoods-in-houston/, I deep dive into all the different suburbs/neighborhoods that you might want to consider, and why. There are many resources here, so please reach out if you are curious what to look at next! Thank you for trusting us.
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