SAN ANTONIO – The current average 30-year fixed mortgage interest rate is higher than 7%, which is a huge swing from the sub-3% rates we saw during the pandemic. So what impact are we seeing on the local housing market?
Real Estate Agent Ronnie Trevino with Keller Williams Heritage joined Leading SA to help break it all down.
“Well, rising interest rates, inflation, and increase in housing inventory have definitely caused homes to stay on the market much longer than they did last year. However, the fact that the average home price has only come down about half a percent, according to the San Antonio Board of Realtors’ latest press release, is pretty promising for prospective sellers and investors,” Trevino said.
Even though San Antonio home prices have increased, it is still a lower cost of living than in other parts of the state.
“San Antonio’s median home sales price remains relatively affordable. And there are several reasons why San Antonio is in high demand. We have, first of all, we have a great job market. We have affordable housing, and we have population growth and military presence. All these factors which could make San Antonio one of the best real estate markets in the nation. So we’re holding steady as compared to those other major metropolitan areas,” Trevino said.
However, the fact remains that interest rates are a big factor in home sales, and 7% is higher than most current buyers are used to seeing. Other than earlier this year, it is the highest average the country has seen since 2001.
Trevino expanded on the interest rates in San Antonio and what’ll happen after it eventually drops.
“I don’t think that they’re going to come down any time soon. I feel like we’re going to hold steady at 7% or above for a while, but I think they will eventually come down. And when they do, it’s going to put San Antonio on the heat radar again when it comes to housing,” Trevino said.
As for people buying homes in San Antonio, Trevino said there are noticeable trends in the market.
“The trend that we’re seeing now or that I’ve been seeing more and more of is that you know, another thing to consider is that we saw a 14% decrease in existing home sales while new construction saw a 36% increase. So we’re seeing a lot of younger families go to the far west side outside 1604 towards the Castroville area. There are a lot of affordable new construction homes that are available for sale there. And a lot of these builders are able to provide great incentives by utilizing their lenders. So a lot of people are seeing this as an affordable option and are taking that route,” Trevino said.
And as we see more and more apartment buildings taking shape around the community, renters aren’t seeing any reprieve from the high costs either.
Trevino explained how he believes prices will not drop anytime soon for renters.
“Rents are holding steady, and actually, they’re increasing. Slow but steady. We saw a 3% increase in rent from last year to this year. And, you know, I think one of the major factors and rents, we see all these new buildings coming up. Well, the percentage of single people living on their own has also increased. So I think that we need a lot more spaces to fill. So, yeah, rents I don’t think are going to come down any time soon,” Trevino said.