New Texas Foreclosures are Fewer than Other States, but Still Significant
Texas foreclosures have been filed at a lower rate than many other states, especially those states that have been in the eye of the foreclosure storm. In April, 2011, a foreclosure was filed on one out of every 1,106 homes in Texas.
That is a rate that is much lower than similar rates in California, Nevada, Florida or Arizona. In Texas, foreclosures in the last year are down 29% over the foreclosures from the prior year. That is, however, still a significant number of homes available.
Another factor that has a huge impact on the Texas foreclosure market is mortgage interest rates that continue to remain at historic lows, with 30 year fixed rate mortgage rates still below 5%. Rates at this level make it easier to attract new homebuyers to purchase homes. Lower rates together with the lower prices for foreclosures create opportunities for buyers that have not existed for many years.
The impact of lower mortgage interest rates on the foreclosure market is twofold. Lower rates make for more buyers and that helps to stabilize or even increase the housing market prices. Lower rates also allow some homeowners who face foreclosure to sell their home more easily than before the foreclosure is actually filed and processed.
Foreclosures have increased in several Texas cities over the last month.
- Houston foreclosures increased by 10.8% and the price of an average foreclosed home is $114,200.
- San Antonio foreclosures increased by 7.0% but the number of foreclosed homes is a little higher with April foreclosure filings on 1 home in 974.
- Kileen foreclosures increased by 25.0% with the number of April filings similar to the statewide averages.
- Laredo foreclosures increased by 29.2% where the average price of a foreclosed home is $133,500.
Other Texas cities showed a decrease in the number of foreclosure filings in April 2011.
- Fort Worth foreclosures fell by 3.8% during the month and the average price of a foreclosed home is $119,300.
- Plano foreclosures dropped by 5.6% and the average price of a foreclosed home in Collin County, the home of Plano, is $221,600.
While home prices appear to continue falling in many areas of the country, according to the Texas Comptroller of the Currency the median price of all single-family homes statewide in Texas rose by a very small 0.1% over the last year. While that is a small amount, it appears to indicate that the bottom of the housing prices for this cycle has been reached.
Fluctuations in the median price over the last year indicate that the housing market appears to have stabilized with no major movements to either the upside or the downside. They further state that there is some evidence that the number of new homes being built may be making a turnaround. Even though the number of building permits issued during the last year dropped from the prior year, the issuance of new home building permits in March rose nearly 50% over the same month a year ago.
Other measures of the Texas economy indicate that there have been increases in sales tax, including tax collections resulting from auto sales, compared to the same month a year ago. Employment figures show that the increase in non-farm employment in Texas is 2.4% higher than a year ago. This underscores the developing economic recovery that will stabilize the housing market and continue the decreasing number of foreclosure filings.
Foreclosures continue to provide opportunities for buyers, which, together with very attractive mortgage interest rates, can help potential homebuyers. This is especially true for first time homebuyers, who have not seen this availability for nearly a decade.
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