Sales, Median Prices, Home Loan Demand Rise in Booming Houston

Houston’s housing market is on track to set another record this year. While sales of existing homes across the U.S. have fallen for about six months, they’ve been rising about 12 percent a month in Houston.

Why is Texas mortgage loan demand rising at a time when many areas of the country are experiencing the opposite pattern?

“We have not had the (price) appreciation other areas have had. We just have a lot of different opportunities and different housing around Houston. I think people can find affordable housing everywhere,” said Lorraine Abercrombie of the Houston Association of Realtors.

Indeed, with home prices in the area one-third below the national median, they look downright cheap. And yet prices are up 6.7 percent this year. Fluctuating mortgage rates, which strongly influence demand in other markets, are not as big a factor in Houston because the market is so affordable to begin with.

Of course, record oil profits don’t hurt. Houston’s economy, while more diversified in recent years with computers, aerospace and health care, still rises and falls with the oil industry.

The city of more than 2 million, the largest in Texas, continues to grow. With plenty of vacant land around, construction is keeping up with demand.

Construction and building permits for single-family homes totaled 36,128 through August, nearly 15 percent more than in the first eight months of last year.