To help save you a little money, we thought we'd share information on common property tax exemptions available in Texas to help homeowners save some money!
It’s no secret that home prices have been increasing rapidly both in north Texas and nationwide. By most expert accounts, home prices have increased at a faster pace than the average income, creating an affordability challenge for some.
The National Association of Realtors (or NAR) monitors housing prices and incomes, as reported by the U.S. Bureau of the Census. They compare the median income with the median home price, at current interest rates, reported by the Federal Housing Finance Board, to come up with a standard measurement known as the Housing Affordability Index. An index of 100 indicates that a family earning the median family income brings in just enough to qualify for a median-priced, pre-existing home mortgage with 20% down, and that the principal and interest portion of the payment does not exceed 25% of their monthly income. More than 100 would mean that their income exceeds the qualifying income, and less than 100 means they do not earn enough to qualify. For example, an index number of 150 means that the median family income earns 150% of the minimum income amount needed. In May, the nationwide housing affordability index was 141.2. For the southern region of the United States, including Texas, the index was just slightly more favorable at 143.8.
For first time buyers, using a similar method and a “starter home” price, the nationwide index was just 104.1 at the end of the 1st quarter this year, down from 107.9 for quarter 1 of 2017. (Local index data is not yet available for 2018.) As prices have climbed overall, first time home buyers are finding fewer “starter” priced homes on the market. With demand remaining strong and supply dropping, bidding wars have become a fact of life in many markets, driving prices even higher. Add rising interest rates, and affordability declines further. Still, home buyers and industry experts remain optimistic, and high numbers of first time home buyers have been in the market.
In the DFW area, the most popular price ranges for a first-time home buyer are mid $200,000 and lower. During the first quarter of 2018, only 3.5% of all homes listed were priced under $100,000; and 25.2% of all homes were within $100,000 and $199,999. 1/3 of the homes on the market fell within in the $200,000 and $299,999 price range, with the median price being $258,000.
While DFW has been a hot market, and still ranks in the top 20 hottest in the nation, some relief may be on the horizon. Overall, the inventory of homes for sale in DFW has increased by 2.6%, compared to the 1st quarter of 2017, and more homes were listed each week than sold so far this summer. This trend suggests that the inventory shortages may be easing, and price increases have begun to cool in many areas. If you’ve been wanting to buy a home and held off for fear of the bidding wars and competition, now might be a great time to start looking again.
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Data sources used, with permission:
· National Association of Realtors
· Texas Association of Realtors
· North Texas Real Estate Information System MLS
Christy grew up in West Texas and is a graduate of Texas Tech University with a bachelor’s degree in Family Studies. She and her family have been residents of The Colony, TX for 3 years and are very....