Texas Mortgage Market Should Boom in 2015 Despite Concerns

Texas Mortgage MarketCalendar year 2015 may be a big one for a state where “everything is bigger,” as far as the mortgage space is concerned. According to an exclusive report by Housing Wire, 2015 should be even better for Texas’ mortgage market, following a 2014 calendar year that was already quite solid.

On a broader level, the housing industry has raised concerns about dropping energy prices, including the recent round of oil price declines that have left the price per barrel at less than $50, down from the $100 per barrel mark months prior. Even then, oil-rich Texas appears to be in “better shape” than other oil-producing parts of the United States, according to publication. The site referenced a separate report it made recently that said oil prices take about two years or so to really affect home prices in oil-rich states. That gives Texas a lot of wiggle room to work with going forward.

In terms of general economic statistics as they relate to housing, the 2014 Texas Annual Housing Report published by the Texas Association of Realtors showed that the “Lone Star State” was among the U.S.’ top states in economic, population, and housing expansion last year.

The report also stated that Texas adds to its population with more out-of-state residents than any other part of the country, and is one of the states that attract the most international home buyers. As such, this all led to different segments of Texas’ broader housing market improving, with the luxury home market benefiting from additional variables such as higher income.

As of November 2014, Texas’ unemployment rate was at only 4.9 percent, well below the national average, as well as the year-ago figure of 6.1 percent. Statistics from Moody’s Analytics also show that Texas may have the United States’ best annual job growth rate, with that figure coming in at 2.7 percent for the coming five years. Among individual metropolitan markets, Dallas-Fort Worth and Houston had among the best employment figures, with jobless rates lower than the Texas average.

Growth of certain businesses and industries may be among the factors driving growth in some of Texas’ top housing markets in 2015. An example would be Toyota’s corporate campus, which is expected to create some 4,000 jobs for North Texas residents. This should satiate housing markets near the corporate area, as workers move from out of state and look for homes in the Dallas metro. This could be similar to what happened in 2014, when 28 San Antonio companies had either expanded or moved to the city, thereby adding close to 5,000 jobs.

Mortgage rates were cited as another factor that could motivate the Texas housing market in 2015, according to Housing Wire. Since the U.S. Federal Reserve announced that it would be ceasing its economic stimulus in October, interest rates have gradually gone down, and most surveys show 30-year fixed-rate mortgages and rates for other home loan products at their lowest levels since May or June of 2013. For 2015 so far, Freddie Mac’s survey has seen 30-year FRMs in the 3.60 to 3.70 percent range, which is a good sign no matter how one looks at it.