Home sales’ 21-month losing streak ends

Falling mortgage rates helps bring about January’s jump of 11% in San Antonio area

Declining mortgage rates brought some buyers back to the housing market in January, sending sales in the San Antonio area soaring after 21 straight months of year-over-year declines.

Buyers in Bexar and surrounding counties closed on 2,018 homes last month, up 11% from a year earlier, according to the latest data from the San Antonio Board of Realtors. That marked the first year-over-year increase since March 2022, when sales increased 1%.

Buyers are reentering the market to take advantage of falling mortgage rates, which peaked at 7.79% in late October but have remained under 7% since early December. The 30year fixed-rate mortgage averaged 6.77% in the week through Thursday, up from 6.64% the week before and 6.32% a year ago, according to mortgage giant Freddie Mac.

“The interest rates have had a big impact,” said Caroline Sanabria, a local real estate agent. “Not only have interest rates dropped, but the prices of homes are still pretty good. They haven’t risen and they’re still in a very competitive state. Sellers are still more inclined to offer concessions, and builders are still offering great incentives.”

The median price of a house was $290,000 in January, down 6% from a year ago.

Inventory — how long it would take for the supply of homes to be sold at the current pace — is also increasing. There was 4.3 months of supply last month, up from 3.25 months, according to Realtors’ data. New listings were up 19%, and active listings were up 24% during the same period.

“I’ve seen a lot more houses going up for sale and staying for sale,” Sanabria said.

Interest in newly built houses continues to outpace interest

in existing houses, in part because builders have been reducing prices and offering rate buy-downs to lure buyers. Sales of new houses were up 28% in January from a year earlier, while sales of existing houses were 4% higher.

“I think 2024 is going to have a lot more movement from both buyers and sellers,” Sanabria said.

Across Texas, sales rose 7.9% last month. The National Association of Realtors has not reported January sales but said existing-home sales nationwide decreased 6.2% in December to the lowest level since 1995. Inventory was up 4.2% from a year earlier, and the median price rose 4.4% to $382,600.

“The latest month’s sales look to be the bottom before inevitably turning higher in the new year,” Lawrence Yun, the national trade group’s chief economist, said in a statement. “Mortgage rates are meaningfully lower compared to just two months ago, and more inventory is expected to appear on the market in upcoming months.”

Depending on how rates change, the spring and summer — usually the busiest seasons for transactions — could be cooler than usual.

“The economy has been performing well so far this year and rates may stay higher for longer, potentially slowing the spring homebuying season,” Sam Khater, Freddie Mac’s chief economist, said in a statement. “According to our data, mortgage applications to buy a home so far in 2024 are down in more than half of all states compared to a year earlier.”