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Is it still a good time to buy a house in Houston? A Hard Money Lenders' Perspective.

Posted by Jim Emerson

Aug 8, 2022 5:00:00 PM

Is it still a good time to buy in Houston

The US economy is facing complicated macroeconomic forces. Amid the highest inflation levels seen in the past 45 years, on June 15, 2022, the Federal Reserve raised interest rates by 75 basis points (bps) after years of holding interest rates low and steady. This decision will increase the Fed’s benchmark federal-funds rate to a range between 1.5% and 1.75%. Most economists believe the Fed intends to raise interest rates by at least 75 bps in July and 75 bps in September. These increases will lead to the highest interest rates we’ve seen in many years. Therefore, home mortgage rates have seen increases and are due to continue to rise during the second semester of 2022.

Within this context, we intend to answer the highly relevant question: Is it still, during the third quarter of 2022, a good time to buy a house in the Houston area?

The Spoiler: it is still an excellent time to buy in Houston

AMI Lenders believes that, during the second semester of 2022, it is still a good decision (and time) to buy a house in the Houston area if the following three criteria apply to you as a purchaser:

  1. You have the required income, down payment funds, and credit scores to qualify for a home loan.
  2. You plan on settling down for at least 5 to 7 years.
  3. You don't currently live in rent-controlled lodgings where you pay rent far below market rates.

The Current Context

Relatively low interest rates. Today's interest rates remain lower than the observed average for the past three decades. Mortgage rates will likely rise in the next semester but will probably hold steady for a few more years, although not as low as 2020-2021 or even the 2010-2019 decade. As we say in the financial world: the markets have already discounted whatever future decisions the Federal Reserve plans on taking regarding interest rates. What should we expect in 2022 in the rapidly changing housing market?

The US economy is only slightly slowing down according to a recent opinion article in the Financial Times[1] It concludes that the US economy’s slowdown to date “is slight and is concentrated in a few significant areas, primarily housing. As we have described, the Fed's sledgehammer will land on a relatively strong economy; not one balanced on the edge of recession." Given this context, you should not be too worried about our economy entering a recession.

Housing prices continue to grow, and property supply is still tight. With the persistent housing shortage and high-income opportunities in the Houston economy, combined with skilled construction workers still in high demand, we appreciate a tight housing market in the Houston area, at least for the remainder of 2022. With home prices that appear to be expensive, they are forecasted by most analysts to climb still somewhat higher Benefits of investing in a Real Estate Property. Having the financial capacity to own might seem like a tall mountain to climb. However, surprisingly those with the financial wherewithal are still apparently large in numbers. Not being priced out of a lovely home and a good deal still requires patience, persistence, and luck. And although it might sound corny, Houston is still a very vibrant economy. It will remain so for decades, no matter what the future can bring.

You should consider these three criteria when purchasing a home in the Houston area.

The mortgage application process should be straightforward if you are a qualified buyer by our standards. In previous blogs, we have discussed how prospective first-time buyers and homeowners upgrading or downscaling their property can evaluate their readiness to apply for a mortgage loan with AMI Lenders. Apply Today. It all comes down to presenting to us evidence of three main aspects:

  • You will be able to meet your mortgage payments in the years to come.
  • You have enough money saved to meet all initial costs and still have some left for unexpected expenses.
  • You have demonstrated that you are not a credit risk; you pay your debts on time and meet your tax obligations unfailingly. In one phrase: you honor your commitments.

If you have your financial documents in order, it should be very straightforward to talk to us and for us to get back to you with an answer.

Plan to own for at least 5 to 7 years. It is well known that the Houston economy likes to go through very marked cycles. A crisis or a boom in the local economy will undoubtedly make home prices go up or down, sometimes in the double-digit percentages. However, each low observed in home prices has, in most cases, been higher than the previous low over seven years or more. From those lows, home prices have gone to new highs. This is called "property appreciation" and has made many real estate owners enjoy excellent investment returns. But always remember, as a homeowner, the investment should always be "for the long run."

A client of ours, back in 2008, bought his home about four months before the financial crisis. Over the next three years, the home's market value, like most homes in the Houston area, dropped by 20 to 30%, and many neighborhoods got shocked by their share of foreclosures. Undoubtedly, the 2008-2011 period was challenging for homeowners regarding the economy at large and the price of their properties from Miami all the way to Seattle. Yet, in the long run, those who could meet their mortgage payments had come ahead by 2015 (seven years after 2008).

Mortgage rates are still reasonable. The days of sub-3 percent mortgage interest on the 30-year fixed are behind us. Mortgage rates rose past 5% in June 2022, for the first time since 2017, so people tend to think these rate levels "are expensive ."To give you a point of comparison, mortgage rates between 2000 and 2010 were always above 5.2%, with 36 out of 40 quarters having yearly rates above 6%. Mortgage rates will most likely continue to climb during 2022-2023. You should ask yourself if these rates in the 5% to 6% range still make sense to you. Historically, these levels can be considered reasonable and a good rate to pay for a long-term mortgage. (Do you remember the nineties when mortgages hovered between 8% to 11%?)

[If you’d like to see a historical chart on 30-year mortgage levels, please refer to:]


Mortgage payments tend to stay fixed while rent levels increase. Most homeowners who bought in 2008 have aggregated mortgage loan, maintenance, and property-tax payments that are lower today (14 years later) than rent on a smaller property. The only exception we can think of is if you live in a rent-controlled apartment. This happens because landlords will adjust rent levels based on inflation. In contrast, fixed mortgage payments stay fixed over the mortgage's lifetime.


If you decide to purchase a home in 2022, can we promise you will come ahead? That's impossible to promise. But, having seen and experienced the Texas real estate market last four decades, we can tell you that now is still an excellent time to buy a home in Houston. Albeit not as great as early 2020, but, mind you, hindsight is always 20-20).

If you have decided to purchase a home in the Houston area, consult with AMI Lenders. We are one of Houston's fastest closers and could become your financial ally. We fund our loans and can move as fast as the law allows. Borrowers in Houston will also have a hard time finding lower rates for hard money or private loans than we offer. We want our customers to succeed and take advantage of the financial opportunities offered by home ownership. Visit our website today and fill out an application for a loan backed by a mortgage.


[1] by Robert Armstrong, "How fast is the US economy slowing?”, The Financial Times, June 17, 2022.


Topics: hard money lenders, home buyers, houston, AMI Lenders


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