Lone Star LO Magazine conducted a Q&A with Brian McAuley, a 15-year veteran loan originator and the producing branch manager for Fairway Independent Mortgage Corporation in Dallas, on the state of the Texas market, what lies ahead, and what steps mortgage originators should take for a smoother 2023.
Q: What are interest rates doing to the Texas market? Are the effects different than what is being seen nationally?
Rising interest rates affect everyone. However, geographically strong markets like the state of Texas are positioned well and will be able to absorb the changes a lot better. Texas is constantly growing and business-friendly, so the amount of people and companies continuing to come here bodes well during challenging times like these.
Q: Are some parts of the state doing better than others when it comes to the effect of interest rates?
I think the big cities handle things the best. There is just more economic growth and capital in the big markets, so the resources give bigger cities the ability to make adjustments and also take advantage of opportunities.
Q: How are they affecting home prices?
Home prices are starting to drop, but it really is specific to the price points. Anything under $500,000 still has a lot of demand, $500,000- $800,000 has cooled off but still has interest and anything $1 million or over seems to be cooling off the fastest and most open to negotiating.
Q: Overall, are certain parts of Texas doing better than others?
I think Dallas is still doing the best overall because of its economic diversity. Dallas is well balanced amongst multiple industries, so it doesn’t suffer as badly during times like these. Austin is great, but they had the biggest price spike in the country, and now they are cooling off the fastest. Austin is also heavy in the tech stock world, and that industry isn’t doing so well which has caused buyers to press pause. Houston is doing OK but it’s an oil-driven economy, so they are up or down based on that alone.