Texas mortgage market will still shine in 2015

Oil bust? Give me a break

We’ve all heard the adage “Everything is bigger in Texas.” Sometimes Texans like to append the saying to “Everything is bigger—and better—in Texas.”

When it comes to the Texas mortgage market, 2015 looks to be both bigger and better than last year, which was a pretty decent year.

The housing industry is concerned about falling energy prices, but Texas, compared to other oil prominent states, is still well positioned. A recent HousingWire article said that it typically takes two years for oil prices to fully affect home prices in oil markets, giving a good cushion to work with.

Texas was a national leader in economic, population and housing market expansion in 2014, yielding significant growth in all areas of Texas real estate, according to the “2014 Texas Annual Housing Report” produced by the Texas Association of Realtors. Texas gains more out-of-state residents than any other state and is a leader in home sales from international buyers, the report said.

The state’s economic and population growth positively impacted multiple segments of the Texas housing market over the last year. Luxury home sales, for example, grew in several metro markets, driven by increasing incomes.

Texas had an unemployment rate of just 4.9% as of November 2014, down from 6.1% in the year-ago period, according to the most recent statistics available from the U.S. Bureau of Labor Statistics. Texas is expected to have the nation’s fastest annual job growth rate at 2.7% over the next 5 years, according to a Forbes article quoting data from Moody’s Analytics.

Some of the state’s major metro areas, including Dallas–Fort Worth and Houston, had even lower unemployment rates than the statewide average. Business growth will jump-start a number of local housing markets. The Toyota corporate campus—expected to bring 4,000 jobs to North Texas—just broke ground and will put some nearby housing markets into overdrive as Californians look to relocate to the Dallas metropolitan area. San Antonio gained nearly 5,000 jobs last year as the result of 28 companies expanding or relocating.

This strong job growth should translate into a robust year for mortgage lending in the Lone Star State. A recent article on HousingWire  referenced a report from the Mortgage Bankers Association forecasting a 7% increase to $1.19 trillion in mortgage originations in 2015, a 15% rise in purchase originations to $731 billion in 2015, and a 3% decrease in refinance originations to $457 billion.

Mortgage rates will be attractive to potential homebuyers and could entice those still on the fence to jump into the market. Rates are at their lowest since May 2013—bringing a healthy dose of optimism to Texas mortgage origination shops. In mid-January, the 30-year, fixed-rate mortgage was lower than 4%. It doesn’t get much better than that. 

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3d rendering of a row of luxury townhouses along a street

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