Home prices and interest rates are unlikely to return to the lows seen in 2021 and 2022, a local expert shared in May.
In a nutshell
Mark Sprague, state director of information capital at Independence Title, a title insurance and real estate settlement company, addressed attendees of a May 14 Round Rock Chamber lunch to share his take on the region's economic outlook.
Texas, Sprague said, benefits from economic resilience with strong job and population growth, defying national trends. Matched with a housing market and interest rate environment returning to historical norms, he said the area is primed for economic balance.
In their own words
Regarding the current housing market, Sprague said the return to interest rates around 6% is indicative of a healthy economy. Interest rates are unlikely to return to the 3% seen in the immediate post-COVID years, he said, referring to the "frenzied" housing market activity during that time as "the juice."
"I'm asked by media, 'When are we going to return to normal?'" Sprague said. "Guys, we're better than we were in 2019. And understand 2020 to '22, you were using the juice."
Home sales in Round Rock have increased year over year, Community Impact reported in May. Sprague described the current market as one favorable to buyers, with wage growth outpacing home price increases.
Affordability is one of the key driving factors for job growth in the state, he said, as those in the workforce can afford to purchase larger homes and more land than in other states for the same value.
What's next?
Sprague said the housing market in the Austin metro area is likely to hit a price bottom later this year, followed my moderate increases in rents. Additionally, he said a surge in suburban commercial real estate could be accompanied by fresh demand for more apartments and high-end office space.
Similarly, rural areas are fast becoming a "sweet spot" for developers with the rise of data centers. Buyers in this area are focusing on utility readiness, road frontage and water access. These developments can offer a boon to cities through property taxes on expensive equipment, he said, but raise a question about use of resources.
"Data centers ... bring a tremendous amount of money," Sprague said. "That's hard to turn down."
