El Paso Real Estate Market: What You Need to Know in 2022
After the bombshell of a housing market the past two years, the El Paso housing market is starting to reflect the situation around the country. The home-buying landscape suddenly looks a lot different with rising inflation prices and high mortgage rates. That is not to say, of course, that there is no demand out there for a new home because there is, but homebuyers are simply dealing with a different reality than a few years ago.
So, what does that landscape look like for home selling and home buying in the Sun City? Let’s look at some numbers in the El Paso area.
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Mortgage Rates in 2022
After the price of the home, the one thing home buyers consider is how much they will be paying in interest on that home when they finance it. In some sense, interest rates reflect the country’s economic situation as they are set by the Federal Reserve as a response to many different factors. The mortgage rates are a constant balancing act, as borrowers seek the lowest rates possible and the lenders seek to minimize their risk when financing large sums of money.
The 30-year mortgage fixed rate reached 5.27% in early May of 2022. This number is higher than it has been for more than a decade. This has the real estate market in a whirl.
The universe of mortgage rates is affected by:
- The owner’s credit history: This one varies from person to person, but the higher the credit history, the easier it is for lending institutions to offer a lower mortgage rate.
- Inflation: The rate of inflation and interest rates are closely in sync. When inflation rises, prices of goods and services are going up, which means people’s purchasing power diminishes. In order to keep investors interested, the interest rates must rise to back an investor’s risk.
- Economic growth in the country: The state of the economy as measured through markers such as Gross Domestic Product (GDP) and employment rate have a considerable impact on mortgage rates.
- Federal Reserve monetary policy: The Fed balances out market instabilities and creates conditions for favorable employment and price stability. Through interest on reserve balances, the adjustment of rates, open market operations, and quantitative easing, the Fed impacts how banks set their interest rates.
- Bond markets: The conditions of the bond market and how much government bonds and corporate bonds offer in investing can indirectly affect how lenders charge for mortgages.
- The state of the housing markets or real estate: The real estate market in and of itself can also impact interest rates. This refers to conditions such as inventory availability, housing trends, material and labor shortages, and other factors.
Housing Trends in El Paso, Texas
A recent KVIA news report indicated that buying a home in El Paso in 2022 might prove a little more difficult during the year but might start to level out. In January of 2022, the current supply of homes was at about 900.
According to an El Paso Times report in January of 2022, the average home in El Paso ran $207,761, which was an increase of 18.5% from the previous year. In El Paso County, the top 10% of homes were sold at prices of at least $360,000. This is also a jump from one year ago.
What to Expect from the El Paso Housing Market in 2022
In the end, whether you are buying a home or selling a home in El Paso, there are a couple of factors you might take into consideration.
- El Paso is growing, albeit at a slightly lower rate than the rest of Texas. The pandemic saw a growing population in many Texas cities. El Paso is no different, although the rate of growth was a bit slower than other Texas cities, the Sun City is still seeing some influx of new people and investment coming in.
- Home prices are rising. If you are selling your home, the rising value of these homes might benefit you. For those looking for a new home, it might mean adjusting their budget.
- Home market competition remains high. Despite the uncertainty of interest rates and inflation, the competition to buy homes remains high. According to one report, El Paso, Texas, Denver, and Minneapolis had the highest number of bidding wars. The real estate bidding wars were a common talking point in real estate circles throughout the pandemic. A home would often receive 20 offers, many ways above the asking prices, due to the fierce competition. In some places, this continues to be the case despite the rising difficulty in affordability with some buyers.
Are You Selling Your Home in El Paso, Texas? You Need a Trusted Home Selling Team
The Brian Burds Home Selling Team specializes in selling homes in the El Paso area. Because of our reach, marketing access, and established connections, we provide El Pasoans with the certainty that their home will sell fast. We are confident in our team that we offer home sellers a guarantee: If we don’t sell your home in 90 days, we buy it.
Want to learn more about how we can sell your home?
Contact Brian Burds today — 915-751-1500