Axios Dallas

Newsletter branding image

March 23, 2024

Hello, Saturday! Texas-based reporter Sami Sparber here with a look at real estate trends.

Programming note: Today, we're talking about how much house Texans can really afford these days.

  • Your local team will be back in your inbox Monday.

Today's newsletter is 775 words — a 3-minute read.

1 big thing: Buying the American dream

Illustration: Maura Losch/Axios

Texas home sales are picking up, largely driven by buyers who waited out last year's sky-high mortgage rates, according to Jef Conn, chairman of Texas Realtors.

Why it matters: You can't control housing prices and inventory, but you can strengthen your finances to strike when the time is right, Axios' Brianna Crane writes.

What they're saying: "While rising inventory will offer buyers more options, median price is expected to remain relatively flat across the state," Conn tells Axios.

State of play: People are generally holding on to homeownership as the American dream, but it might feel far from reality, depending on where you live.

  • In Texas, where real estate is more affordable compared to incomes, people in their late 20s and early 30s are hunting for their first home.
  • But for those in higher-cost areas, it's not even on their radar, according to finance writer Katie Gatti (Money with Katie).

The big picture: Wannabe buyers fall into two camps, according to Katy Song, chief financial planner of Domain Money. There are people who are over-prepared, and people who think they can afford more than they realistically can, Song tells Axios.

Here are her tactical tips for first-time home buyers to prepare wisely for taking the plunge.

💳 Look at your credit. If you don't have credit or it's not in good shape, it's not time to buy, she says. Your credit score determines how willing lenders are to give you money.

  • If you're starting from scratch, Song recommends getting a secured credit card. To start building your score, put a recurring payment like Netflix on the card, and automatically pay it off every month.
  • If you have credit card debt, devise an aggressive plan to pay it off.
  • You don't need to pay off your student loan debt or even car loans before applying for a mortgage.

More expert tactics

2. Our price cuts, charted

Share of active home listings with price drops in select Texas metro areas
Data: Redfin; Chart: Kavya Beheraj/Axios

Competition for homes is a bit more relaxed in Texas' major metro areas than other parts of the country, according to Zillow senior economist Orphe Divounguy.

By the numbers: Roughly 3 in 10 homes for sale in San Antonio, Dallas, Houston and Austin saw price drops in January, per the latest housing market data from Redfin.

Zoom out: Each metro posted a higher share of discounted listings compared to the U.S. overall.

  • Price cuts surged nationwide in summer 2022, partly because rising mortgage rates caused home shoppers to back out of the market, per Redfin.

What's next: "Screen appeal is the new curb appeal," Divounguy tells Axios.

  • Listings that cater to Zillow-surfers by including a 3D home tour and interactive floor plan can get more page views, saves and shares, Divounguy says.

3. Texans' starter homes

Illustration: Shoshana Gordon/Axios

Axios Local readers across Texas told us about their first homes. Here's a sampling of what y'all said.

🫣 Curtis Dickinson bought his San Antonio home sight unseen 15 years ago while living in Massachusetts.

  • "I am now a proud Texan," says Dickinson, who tells Axios he watched a walk-through of the property via CD.

📦 Sara Schorn recently ditched her Austin apartment for a three-bedroom house in Lockhart.

  • "It's new construction but built in an established neighborhood, not one of the cul-de-sac cookie-cutter neighborhoods … The growth won't catch up to where I am for some time."

🏘️ Morgan Peters closed on a house in Houston's Energy Corridor area last spring.

  • "After living in Montrose for seven-plus years, we really wanted to buy a roughly 2,000-square feet home in a neighborhood that had a suburban feel."

📈 Judy Kriehn bought a small two-bedroom in Garland in 1983, when the annual average mortgage rate topped 13%.

  • "I was fortunate to qualify for a special rate of 10% offered for first time home buyers in certain neighborhoods."

🤑 Cody Dishman purchased a starter home in Cedar Park in 2009 for $160,000.

🏚️ Lisa Stout bought her first home, a foreclosure in Spring, at an auction in 1986. "That is all we could afford at the time."

🛠️ Randy Case purchased a repossessed Austin home in 2004 for $80,000, fixed it up and lived there for 15 years.

  • "The house was a wreck. The back door didn't lock, there were dead cockroaches and other dead bugs all over, and everything inside needed to be replaced."

Go deeper: Inside Biden's plan to unlock the housing market's golden handcuffs

4. ☎️ Calling all homeowners

Illustration: Maura Losch/Axios

We're pulling together a guide for prospective homeowners and need your help.

  • What sacrifices are you making to afford your monthly mortgage?
  • Do you have any budgeting tips for those still saving for a downpayment?
  • If you're currently saving for a home, what's your strategy?

Email [email protected] with your name and neighborhood. We might feature your insights in an upcoming newsletter.

ğŸ˜Ž Sami is showing off her Trader Joe's mini tote bag.

Thanks to our editor Ashley May and copy editor Bill Kole.