U.S. home prices fell by 3% over the last quarter, marking the largest quarterly decline since the housing market first collapsed. It’s a familiar problem with supply and demand, but it’s more persistent this time around. There are too many homes for sale, and not nearly enough qualified buyers to absorb the inventory.
Freddie Mac and Fannie Mae used to be government-sponsored enterprises (GSEs). But not they are actually managed by the government, following a seizure that took place during the recession. These organizations largely determine the borrowing criteria for mortgage loans. So it’s noteworthy that they are talking about a 10% down-payment requirement.
Is now a good time to buy a house? This is one of the most common questions we get from readers. It’s also a question that cannot be answered with a simple ‘yes’ or ‘no’ across the board. So we’ve created a Venn diagram to show the overlapping factors that need to be considered when answering this question.
Like most Texas cities, Houston avoided the the real estate speculation and pricing bubbles that affected other major cities in the U.S. So it was somewhat shielded by the effects of the housing market crash. Given this history, it’s no surprise that this market is so stable right now, compared to the rest of the nation.
Houston was one of the most stable real estate markets in the country last year, at a time when home prices were still free-falling in many parts of the country. We expect this to continue into 2011. In fact, the same could be said for most major cities in Texas, a state that escaped the worst of the housing crisis.
Like most cities in Texas, Austin escaped the worst of the housing market collapse. The city didn’t have much of a bubble going into the crisis, so home prices didn’t have very far to fall. This makes it something of an anomaly, compared to the rest of the country. It’s good news for homeowners, and for the local economy in general.