The Woodlands Real Estate Market Update | May 29, 2023
Today I will be sharing with you our perspective on the local real estate market here in The Woodlands, Texas, specifically a market update for the neighborhood of The Woodlands. 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 The Woodlands?
We currently have 174 homes pending, with 52 homes sold in the last two weeks, averaging a sale price of $227 a square foot. Fifty-two homes sold over the asking price, with one home selling 14% above the listing price.
Compared to the two weeks prior: The number of homes sold is still the same, but the average sales price is up $687,458 ($639,285 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.
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 The Woodlands.
Jo's Two Cents
The interest rates the last couple of weeks have been playing games, but all analysts are still pointing to interest rates dropping significantly this summer. I personally am not holding my breath, but still hopeful.
Sales (clients going under contract) at Jo & Co. were super strong the months of March and April. We are seeing a little slow down, but we expect things to pick back up once graduations and the last day of the semester are behind us.
New construction sales are still our strongest. Nationally this is a huge trend in cities with high amounts of inventory. Montgomery and Fort Bend our our most popular counties, with the Harris county portions holding Katy and Cypress in the top three list. The most popular school districts have been Katy ISD and Cypress ISD.
The biggest reasons why folks are choosing new construction is low cost of maintenance, low electricity bills, large builder incentives, many options to choose from, flexible close dates, master planned community amenities, a high concentration of people in the same stage of life, and who doesn’t love brand new!
In general though, the greatest problem affecting the real estate market is the lack of inventory. So a really popular question on the mind of others is, “if I sell my home, where do I go?” And lucky for us in the Houston area, new construction is a big option. I would never encourage someone to sell, if the home they desired wasn’t also available.
Correcting LLPA Misinformation
You may have seen conflicting stories regarding the changes due to Loan Level Price Adjustments (LLPAs). LLPAs are risk-based pricing adjustments charged during loan origination that vary based on credit score, loan-to-value (LTV) ratio, the type of mortgage, and other factors.
We wanted to set the record straight for you. First, the changes only affect Conventional loans. Yes, LLPA fees for Conventional loan borrowers with higher credit scores increased slightly this year. However, the fees are still greater for borrowers with lower credit. The changes do not penalize homebuyers with good credit. The small percentage adjustments were made to help make homeownership more accessible for those with lower credit, but is not rewarding borrowers with low credit.
It is typical for these types of adjustments to be made. This chart highlights the percentage fee changes:
In general, here is a high-level summary of the new pricing matrix changes on Conventional purchase loans:
- Includes new credit bands beyond a 740 score (previously, anyone with a FICO score of 740 would pay the same fees as someone with a score of 780).
- Borrowers with better credit will still pay less than someone with worse credit.
- Borrowers with credit scores between 680 and 779 with down payments between 10% and 20% will see a fee increase.
- First-time homebuyers with low or moderate household income pay no added fees whatsoever.
- All borrowers who put less than 5% down across all FICO scores will benefit.
Questions? I would love to connect you with a local lender to help clear up any confusion.
What is happening in the real estate market nationally?
Mortgage rates trended higher last week with stronger-than-expected inflation and consumer spending data. New home sales increase in April, mortgage application submissions fell, continuing jobless claims slipped and initial jobless claims increased. The GDP estimate for quarter one slowed, pending home sales remained unchanged.
|MORTGAGE RATES CURRENTLY TRENDING||THIS WEEK'S POTENTIAL VOLATILITY|
- What the MBA is saying about the market forecast for the rest of the year. Listen Now >>
- How homeowners insurance can help you out in surprising situations. Read Now >>
- Housing construction looks positive. Read Now >>
New home sales were at a seasonally adjusted annual rate of 683,000 in April, a higher-than-expected jump of 4.1% month-over-month.
Mortgage application submissions fell 4.6% during the week ending 5/19. Refinance application submissions decreased 5% while purchase applications decreased 4%.
Continuing jobless claims slipped by 5,000 during the week ending 5/13 to a level of 1,794,000. Initial jobless claims increased by 5,000 the following week to 229,000.
The GDP estimate for quarter 1 was slightly lower than before, rising 1.3% vs. 2.6% prior.
Pending home sales saw a 0% change in April but contract signings increased in three U.S. regions.
The core personal consumption expenditure (PCE) index reported an unexpected rise in April, rising 0.4% month-over-month vs. the 0.3% expected climb. Personal income was right in line with expectations, increasing 0.4% month-over-month. Consumer spending soared 0.8% month-over-month, double the expected increase.
Review of Last Week
TURBULENT TRADING... Concerns about the debt ceiling sent stocks down, but angst eased on Friday when reports a deal could be near sparked a rally that sent two of the three major indexes ahead for the week.
There were also concerns over rate hikes, as no less than four Fed members commented that the central bankers may not be done raising rates. One FOMC voter emphasized, "fighting inflation continues to be my priority."
So, another hike may be coming, as the PCE Price Index, the Fed's favorite inflation measure, ticked up in April. Plus, the economy doesn't seem to be cooling much, with strong consumer spending providing plenty of support.
The week ended with the Dow down 1.0%, to 33,093; the S&P 500 UP 0.3%, to 4,205, and the Nasdaq UP 2.5%, to 12,976.
Bond prices had a down week overall, with the 30-Year UMBS 5.5% falling 0.94, to $99.06. The national average 30-year fixed mortgage rate continued up 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’s latest Monthly Housing Market Trends Report showed the number of homes actively for sale in April was 48.3% higher than last year, though still well below pre-pandemic levels.
HOME PRICES, CONSTRUCTION SPENDING, JOBS... Home prices should decline by a small amount in the March S&P Case-Shiller Home Price Index. Overall Construction Spending is expected to increase in April, and we'll watch the residential part. The May jobs report is forecast to book modest gains in Nonfarm Payrolls, Average Hourly Earnings, and the Unemployment Rate.
U.S. financial markets were closed yesterday, May 29, in observance of Memorial Day.
April saw sales of new homes surge to a 13-month high, up 4.1% from March and 11.8% ahead of last year. Inventories have recently made substantial gains, and the median price is down 8.2% from a year ago.
The Mortgage Bankers Association reports new-home purchase applications rose year-over-year for the third straight month. They note: “the broader housing market is leaning more on new construction to boost for-sale inventory.”
Meanwhile, contract signings on existing homes were flat in April, although three of the four major U.S. regions saw monthly gains. Only the Northeast’s numbers decreased, pulling down the national average.
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.
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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