Texas Mortgage Trends: Rising Rates, Insurance Costs, and More

The Texas Real Estate & Finance Podcast with Mike Mills

Ready to unlock the latest insights on Texas mortgage trends? Join Mike Mills as he breaks down rising rates, skyrocketing insurance costs, and what these mean for the summer housing market. Dive in to learn how these trends could impact your next big investment.

In this episode of The Texas Real Estate and Finance Podcast, Mike Mills dives into the current Texas mortgage trends, offering a comprehensive update on the ever-changing real estate market. He begins by examining the recent rise in mortgage rates, explaining the factors pushing rates above 7% and what this means for the summer buying season. Mike also sheds light on the skyrocketing home insurance premiums in Texas, discussing how these costs can impact homebuyers’ loan qualifications. The episode provides valuable insights into the latest housing inventory data for both the national and DFW markets, highlighting increasing inventory levels and their implications for affordability. Additionally, Mike covers important updates on VA loan commission changes and explores various home equity loan options available to homeowners. Whether you're a realtor, investor, or homebuyer, this episode is packed with essential information to help you navigate the Texas real estate market.

Key Takeaways:

Rising Mortgage Rates:

Mortgage rates have recently climbed back over 7%, influenced by strong economic data. Mike explains how factors such as GDP and inflation reports impact these rates and what this means for the real estate market over the summer. Understanding these trends is crucial for realtors and investors to make informed decisions.

Increased Housing Inventory:

Inventory levels are on the rise both nationally and in the DFW area, with a 37% increase in listings compared to last year. This growth provides more options for buyers and can help stabilize home prices. Mike highlights how this trend is beneficial for home affordability and market dynamics.

Skyrocketing Home Insurance Costs:

Home insurance premiums in Texas have seen significant increases, now averaging around $4,000 per year. Mike discusses the reasons behind these rising costs, including the impact of frequent and severe weather events. He emphasizes the importance of getting insurance quotes early in the home-buying process to avoid potential loan qualification issues.

VA Loan Commission Changes:

Upcoming changes to VA loan commission rules could have a substantial impact on veterans and realtors. Starting in August, VA buyers may face challenges if sellers are unwilling to pay agent commissions. Mike shares the latest updates on potential fixes and how these changes aim to level the playing field for VA buyers.

Leveraging Home Equity:

With high levels of home equity and rising credit card debt, homeowners have several options to access their equity, such as home equity loans and HELOCs. Mike explains the benefits and drawbacks of these financial tools, providing listeners with strategies to manage debt and improve cash flow. This knowledge can be a game-changer for realtors looking to assist their clients effectively.

Time Stamped Summary:

0:08 - 0:21

Introduction:

Mike Mills welcomes listeners to the Texas Real Estate and Finance Podcast. He introduces himself as a North Texas mortgage banker with Geneva Financial and mentions the peak home buying season.

0:21 - 0:47

Host Background:

Mike shares his background, highlighting his expertise in helping clients with unique loan situations. He encourages listeners to reach out for assistance with out-of-the-box mortgage needs.

0:47 - 1:10

Episode Overview:

Mike outlines the topics for the episode, including mortgage interest rates, housing inventory, home insurance premiums, VA rule changes, and home equity loans.

1:10 - 1:59

Mortgage Interest Rates:

Discussion on the recent rise in mortgage rates, now over 7%, and the factors driving this increase. Mike explains how upcoming GDP and PCE inflation data could impact these rates further.

1:59 - 3:15

Economic Data Impact:

Explanation of how economic indicators like GDP and inflation influence mortgage rates. Mike highlights the connection between the labor market and potential future rate cuts by the Fed.

3:15 - 4:41

Inflation and Housing Costs:

Mike discusses the impact of rising costs in insurance, energy, food, and housing on inflation. He mentions CoreLogic's report on rental prices and how overbuilding in multifamily housing has affected the market.

4:41 - 5:10

Inflation News:

Positive news on inflation from Target's price cuts on common items, reflecting broader economic trends. Mike explains how consumer behavior shifts towards cheaper retailers in response to economic pressures.

5:10 - 5:32

Mortgage Rate Outlook:

Summary of the relationship between inflation, unemployment, and mortgage rates. Mike sets expectations for staying in the 7% rate range in the near future.

5:32 - 6:17

Housing Inventory Trends:

Detailed analysis of weekly housing inventory changes, with a significant increase in listings compared to the previous year. Mike discusses the implications for home affordability and market dynamics.

6:17 - 6:57

Purchase Applications Decline:

Observation of the decline in purchase applications, highlighting seasonal trends and comparing current data with the previous year. Mike examines potential reasons for this decline.

6:57 - 8:09

U.S. Population Forecast:

Discussion on the U.S. Census Bureau's downgraded population forecasts and their long-term implications for housing inventory and affordability. Mike cites Lance Lambert's reporting on this significant trend.

8:09 - 9:48

DFW Housing Market:

Local market insights for Dallas Fort Worth, noting the high volume of home sales and active listings. Mike shares data from the Dallas Morning News and REMAX, emphasizing inventory growth and median home prices.

9:48 - 10:30

Home Insurance Costs:

Overview of the rising home insurance premiums in Texas and other states. Mike explains the factors contributing to these increases, including severe weather events and inflation.

10:30 - 12:32

Impact on Homebuyers:

Advice for homebuyers on managing insurance costs and getting quotes early in the buying process. Mike shares personal experiences and changes in estimating insurance premiums for loans.

12:32 - 13:20

VA Loan Commission Rules:

Update on upcoming VA loan commission rule changes and their potential impact on VA buyers and realtors. Mike explains the current situation and anticipated policy adjustments.

13:20 - 16:05

Home Equity Loans:

Detailed explanation of different types of home equity loans, including second liens, HELOCs, and cash-out refinances. Mike discusses the pros and cons of each option and their relevance in the current economic climate.

16:05 - 17:48

Freddie Mac and Equity Loans:

Information on Freddie Mac's plans to enter the equity loan market and the implications for homeowners. Mike explains the proposed changes and how they could benefit borrowers with high credit card debt.

17:48 - 21:07

Realtors' Role in Equity Loans:

Encouragement for realtors to reach out to past clients about home equity options. Mike emphasizes the importance of being a knowledgeable resource for clients and using this information to generate new business.

21:07 - 22:04

Conclusion and Teaser:

Mike wraps up the episode, summarizing the key points discussed. He teases the next episode featuring digital marketing expert Jeff Zempfer and encourages listeners to tune in for valuable insights.

Resources:

Mortgage News Daily

Stay updated with the latest mortgage rates and news.

Website: https://www.mortgagenewsdaily.com

CoreLogic Report

Access detailed insights on rental prices and housing trends.

Website: https://www.corelogic.com

Dallas Morning News

Read the latest reports on the Dallas Fort Worth housing market.

Website: https://www.dallasnews.com

REMAX Data

Get comprehensive data on housing inventory and market trends.

Website: https://www.remax.com

Lance Lambert's Resi Club on Twitter

Follow for great data and insights on the U.S. population and housing market trends.

Twitter: https://twitter.com/NewsLambert

National Association of Insurance Commissioners (NAIC)

Review their reports for detailed information on insurance premiums.

Website: https://www.naic.org

Freddie Mac's Proposal on Equity Loans

Learn about Freddie Mac's plans to enter the equity loan market.

Website: https://www.freddiemac.com

U.S. Census Bureau

Access population forecasts and demographic data.

Website: https://www.census.gov

Previous Podcast Episode on Home Insurance

Listen to Mike Mills' discussion with Brad Bingham from Allstate on rising insurance premiums.

Podcast Episode: https://www.thetexasrealestateandfinancepodcast.com/rising-insurance-cost/

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