Homes in Texas continued to appreciate in value in the third quarter of 2022 but at a lower rate than the “record highs observed in the first two years of the COVID-19 pandemic,” reported the Texas Real Estate Research Center at Texas A&M’s Texas Housing Affordability Outlook. Year-over-year median price growth was 9.7 percent, while first quarter growth was 8.9 percent. This equaled a third quarter median price of $340k and a first quarter median home price of $245k.
A “rapid rise in mortgage interest rates continued to diminish home-purchasing potential,” with rates averaging 5.62 percent in the third quarter, compared to 3.82 percent in the first quarter and 5.27 percent in the second quarter.
While a 13.6 percent increase in median family income outpaced median home price, higher mortgage rates effectively wiped out any additional affordability. “All other things being equal, lower (higher) mortgage interest rates translate into lower (higher) monthly mortgage payments and ease (diminish) purchase affordability.” The report stated the Federal Reserve is anticipated to continue raising interest rates in the near-term “to reduce inflationary pressures, which will likely prompt additional increases in mortgage interest rates.”