Home prices in El Paso have skyrocketed over the past two years, as they have nationally. But this area remains among the cheapest markets in the country, according to recently released data.
El Paso’s record median selling price, or market midpoint, of $212,200 for resale single-family homes in the fourth quarter of 2021 was up 14% from 2020, but was the 44th-highest median price. lowest among 183 metropolitan areas tracked by the National Association of Realtors.
El Paso was the fourth-cheapest market among 11 Texas metropolitan areas. (See the tables at the end of this story.)
The median price is nearly 26% higher than the 2019 median price of $169,100, according to the data.
The Greater El Paso Association of Realtors reported a higher median selling price for El Paso in December of $217,375. It rose slightly in January to $217,750.
“We’re a lot more affordable than (a lot) other places, that’s for sure,” said Jackie York, a longtime El Paso real estate agent and president of the Greater El Paso Association of Realtors.
“Where we tend to be a little higher than the rest of the nation is in our property taxes.”
This adds to the mortgage payments.
Continued:Texas’ tax burden is heaviest for the poorest residents of El Paso. Debt increases this burden.
Strong sales coupled with a housing shortage, exacerbated by longer construction times for new homes during the COVID-19 pandemic, have driven prices up in El Paso and across the country.
Austin was the most expensive market in Texas and the 26th most expensive in the nation with a median selling price of $485,400 on resale homes during the last quarter of last year. Wichita Falls had the lowest price in Texas at $172,100.
The San Jose, California metro area was the most expensive market in the United States with a median price of $1.67 million. Decatur, Illinois was the lowest at $110,400.
Home prices in El Paso attract buyers from other areas
El Paso’s lower prices drew many out-of-state buyers to El Paso, many of whom outbid other buyers with cash offers — often cash from the sale of their property. old house, York said.
“It affects a lot of El Pasoans,” as sellers often prefer cash or conventional loans over FHA or VA loans, which are the loans most commonly used by El Pasoans, York said.
“What is making it difficult right now (for buyers) is because of the low inventory. We have less than 30 days supply of homes (for sale) in all of El Paso,” York said recently. That translates to fewer than 500 existing and new homes on the market, compared to a more normal market where a six-month supply of around 2,000 homes would be for sale, York said.
“We have a lot of buyers right now, we just don’t have the houses for them,” she said.
More income needed to afford a median-priced home
Soaring prices mean more income is needed to buy a house.
In El Paso, the annual household income needed to pay principal and interest on a mortgage for the home at the median price of $212,200 increased nearly 19% in 2021 compared to 2020, according to data from the National Association of Realtors.
A household in El Paso needed an income of $41,834 in the fourth quarter of last year to afford a home loan with a 5% down payment for a home at the median price, the data showed. That’s $6,635 more than was needed in 2020 and $5,749 more than was needed in 2019.
The income level of $41,834 was lower than El Paso’s median household income of $46,871 in 2019, according to the latest data from the U.S. Census Bureau.
By contrast, in 2016, the eligible household income in El Paso was $33,194 to buy a home at the median price of $152,900.
First-time buyers are struggling, other buyers are able to cope with rising prices
“The price escalation has taken a toll on home buyers (nationwide), forcing many to find extra money and forcing others to delay buying altogether,” said Lawrence Yun. , chief economist for the National Association of Realtors, in a statement. .
“A number of families, especially potential first-time buyers, are increasingly being squeezed out of the market, and that’s why supply is key to expanding homeownership opportunities,” Yun said.
Continued: A French company plans to add another electrical products factory in El Paso or Santa Teresa
GECU, El Paso’s largest credit union and one of the city’s largest financial institutions, saw a 25% drop in the number of first-time buyers getting home loans last year, compared to 2020. This decline was attributed to several reasons, including less affordability as home prices rose, outbidding by other buyers, and a reluctance to pay above a home’s appraised price, according to a statement from the GECU.
However, “GECU had a record year” overall for home purchase loans and mortgage refinancing, the statement said.
Surprisingly, York realtor and Cheryl Montenegro, El Paso branch manager and loan officer for Finance Home America, a national mortgage lender, said the price hike hasn’t stopped most buyers with whom they deal with qualifying for home loans.
“Given that market prices have gone up, you would think they couldn’t (qualify). But, honestly, people are doing better with their debt, they are paying off their little credit cards,” Montenegro said.
Federal changes last year that reduced the amount of student loans counted as part of a borrower’s total debt helped because many loan seekers in El Paso have a lot of student debt, Montenegro said.
Rising interest rates will make it harder for some buyers to get loans
Additionally, mortgage interest rates that have been low for several years have also offset some of the price increases, Montenegro and York said.
Continued: El Paso airport traffic increases in 2021, but lags behind pre-pandemic levels as more flights sought
Mortgage rates, which hovered around 3% last year, rose at the start of the year and are expected to rise further next month.
This will cause problems for some people to qualify for a home loan, as mortgage payments will be higher, Montenegro said.
“I have a lot of people scrambling right now because they’re worried the rates will go up. And it’s. There are no ifs, ands, or buts about it. The government (the Federal Reserve Bank) has already announced that it will raise rates in March,” she said.
Texas home prices
Median Resale Home Selling Price in Select Texas Metro Areas in Q4 2021 and Percentage Change from Q4 2020:
Austin: $485,400, +25.8%
Dallas-Fort Worth: $350,000, +18%
Houston: $316,900, +15.8%
San Antonio: $312,500, +18%
Sherman Denison: $276,500, +25.1%
Corpus Christi: $252,700, +8%
Abilene: $221,700, +12.3%
El Paso: $212,200, +14%
Beaumont-Port Arthur: $204,500, +8.4%
Amarillo: $201,100, +7.8%
Wichita Falls: $172,100, +14.1%
Source: National Association of Realtors
Regional house prices
Median Resale Home Selling Price in Selected Western and Southern US Metro Areas in Q4 2021, and Percentage Change from Q4 2020:
San Jose, California: $1.67 million, +19.6%
Denver: $617,600, +20.5%
Salt Lake City: $505,700, +24.4%
Austin: $485,400, +25.8%
Boise, Idaho: $473,800, +24.3%
Phoenix: $445,800, +25.7%
Vegas: $428,400, +24.7%
Tucson, Arizona: $349,800, +24.9%
Albuquerque: $307,400, +16.7%
Memphis: $260,700, +13.8%
El Paso: $212,100, +14%
Oklahoma City: $201,500, +11.3%
Source: National Association of Realtors