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TRERC’s Annual Report Excellent in HoustonTRERC’s Annual Report Excellent in Houston2022-06-16T05:00:00Z


COLLEGE STATION, Tex. (Texas Real Estate Research Center) – An annual report that includes a calendar of Texas scenery has won a Bronze Quill Award of Excellence for the Texas Real Estate Research Center at Texas A&M University.

The Bronze Quill is the highest professional recognition given by the Houston Chapter of the International Association of Business Communicators (IABC).

“Traditional annual reports are expensive to print, rarely read by those who receive them, and soon end up in the recycling bin," said TRERC Communications Director David Jones. “Over the years we experimented with annual reports in many formats, but the absolute winner came with the addition of a calendar featuring Texas scenery.

“Today, our annual report has a year-long shelf life and hundreds of followers who take a survey or answer a questionnaire just for a chance to receive one."

The annual report + calendar combination, has impressed judges for more than 20 years. In that span, the report has garnered some 30 awards, including IABC's highest worldwide recognition in 2020, the Gold Quill Award of Excellence.

See the Center's award-winning annual report here.    

Funded primarily by Texas real estate license fees, TRERC was created by the state legislature to meet the needs of many audiences, including the real estate industry, instructors, researchers, and the public.

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Thousands of pages of data are available at the Center's website. News is also available in our twice-weekly electronic newsletter RECON, our Real Estate Red Zone podcast, our daily NewsTalk Texas feed, on Facebook, on Twitter, on LinkedIn, and on Instagram. To request a free press subscription to our quarterly flagship periodical TG magazine, contact David Jones at the e-mail address above.​

https://mailchi.mp/mays/trercs-annual-report-excellent-in-houston20-0622
Rising interest rates shock Texas’ manufactured housing industryRising interest rates shock Texas’ manufactured housing industry2022-06-10T05:00:00Z

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COLLEGE STATION, Tex. (Texas Real Estate Research Center) – Texas' manufactured-housing outlook worsened for the first time during the COVID-19 pandemic recovery. According to the latest Texas Manufactured Housing Survey (TMHS), industry activity slowed for the second straight month as sales slipped and trended downward.

“The May TMHS made it clear that new-order volume is moving down for Texas manufacturers," said Rob Ripperda, vice president of operations for the Texas Manufactured Housing Association.

“Interest-rate increases are hitting retailers on two fronts, with homebuyers now facing higher mortgage payments and rate increases in inventory-lending raising retailers' carrying costs on unsold homes.

“Those factors elevate the risk associated with ordering more homes to the retail lot. As the retail channel cools, there is still healthy demand from communities and developers whose order delivery times may now be accelerating."

Despite the sales slowdown, Texas housing manufacturers increased production for the 12th consecutive month in an attempt to reel in historically high backlogs.

“Manufacturers still have a healthy backlog of orders to work through, and there is no indication of plans to decrease the pace of home construction, especially amid increased payrolls and capital expenditures," said Ripperda.

The TMHS corroborated an ongoing employment expansion despite a tight labor market, forcing manufacturers to elevate wages and earnings.

Pricing pressures, however, showed signs of easing as the TMHS supply-chain disruption index reached its lowest level since the pandemic started, and the raw-materials price index reached a year-to-date low.

“Prices on critical inputs for manufactured housing are beginning to see some relief," according to Dr. Harold Hunt, research economist at the Texas Real Estate Research Center (TRERC) at Texas A&M University. “For example, lumber prices have declined almost 60 percent from where they were a year ago."

TMHS respondents expect several supply-side challenges to subside in the next six months, but many challenges loom.

“Interest rates will undoubtedly continue to increase as the Federal Reserve steps up its fight to control the highest inflation we've seen in 40 years," said Hunt, “and there is more and more uncertainty surrounding the overall health of the economy."

​Funded by Texas real estate licensee fees, TRERC was created by the state legislature to meet the needs of many audiences, including the real estate industry, instructors, researchers, and the public. 

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Thousands of pages of data are available at the Center's website. News is available in our twice-weekly electronic newsletter RECON, our Real Estate Red Zone podcast, our daily NewsTalk Texas feed, on Facebook, on Twitter, on LinkedIn, and on Instagram. To request a free press subscription to our quarterly flagship periodical TG magazine, contact David Jones at the e-mail address above.

 

Editor's note: As of Jan. 1, 2021, our official name is the Texas Real Estate Research Center.

Subscribe to Center news releases here.

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https://mailchi.mp/mays/rising-interest-rates-shock-texas-manufactured-housing-industry19-0622
First-time Texas homebuyers need $10,000 more income to buy $229,000 houseFirst-time Texas homebuyers need $10,000 more income to buy $229,000 house2022-06-01T05:00:00Z


COLLEGE STATION, Tex. (Texas Real Estate Research Center) – Rising mortgage interest rates continue to push potential buyers, particularly first-time buyers, out of the market for homeownership, says the affordable housing expert for the Texas Real Estate Research Center (TRERC) at Texas A&M University.

“As mortgage interest rates increase, the total monthly mortgage payment also increases," said Dr. Clare Losey, assistant research economist for TRERC. “This increases the required income to qualify for a mortgage loan. In other words, as mortgage interest rates increase, purchasing power declines, and households must earn more money to purchase the same-priced home."

At the start of 2022, the 30-year fixed-rate mortgage average in the U.S. hovered around 3 percent, according to Freddie Mac. By May 19, the average rate had jumped more than 2 percentage points to 5.25 percent.

“In the first quarter, the required income to qualify for a mortgage loan at a rate of 3 percent amounted to $59,665 for the first-quartile Texas sales price of $229,000. The first-quartile sales price generally reflects the home price affordable to first-time buyers," said Losey.

The required qualifying income increased more than $10,000 to $70,891 at a rate of 5.5 percent. She estimates only 30 percent of Texas renters—i.e., potential first-time buyers—could afford the state's first-quartile sales price at 5.5 percent. This is a decline of nearly 10 percentage points from the estimated 38.9 percent of Texas renters who could afford the state's first-quartile sales price at a rate of 3 percent.

For more information, see the Center's new Texas Housing Affordability Outlook report. ​

https://mailchi.mp/mays/first-time-texas-homebuyers-need-10000-more-income-to-buy-229000-house18-0522
Texas’ manufactured-housing industry sees price improvements, but long-run challenges persist Texas’ manufactured-housing industry sees price improvements, but long-run challenges persist2022-05-10T05:00:00Z

​​​COLLEGE STATION, Tex. (Texas Real Estate Research Center​) – Price pressure for raw materials showed signs of easing in April, according to the latest Texas Manufactured Housing Survey (TMHS). While prices continued to increase, the raw-materials index marked its largest monthly deceleration since July 2020, and manufacturers believe that trend may continue.

"The slowdown in price appreciation for raw materials is a welcomed sign," said Dr. Harold Hunt, research economist at the Texas Real Estate Research Center (TRERC) at Texas A&M University, "but the Bureau of Labor Statistics’ Producer Price Index (PPI) continues to trend above double-digit growth. The PPI is released with a one-month lag, so we’ll have to wait until next month to see if the rest of the economy experienced price relief during April."

The root of the manufactured-housing’s price improvement is unclear, and supply-chain disruptions persisted for the eighth straight month. Production lines, however, continued to pump out new homes and chip away at backlogs.

While demand remained robust, the combination of supply-side challenges, growing uncertainty, and impending regulatory burdens weighed on the industry’s outlook and overall optimism.

"The Department of Energy’s consideration of updating efficiency standards and its preference for the most stringent changes tempered manufacturers’ expectations," said Rob Ripperda, vice president of operations for the Texas Manufactured Housing Association.

The TMHS regulatory-burden index reflected these concerns with a positive reading in 13 of the past 14 months.

"Other headwinds include higher mortgage interest rates for both real and personal property as well as a hit to housing manufacturers’ stock prices," said Ripperda.

The industry anticipates a slowdown in capital expenditures and hiring activity through the summer to adjust to these obstacles. While Texas’ manufactured-housing outlook remains positive, the health and resilience of the broader economy remains a critical factor moving forward.​

https://mailchi.mp/mays/texas-manufactured-housing-industry-sees-price-improvements-but-long-run-challenges-persist?e=bdd6d9fbc217-0522
This year’s high property appraisals overstate tax bill increases for manyThis year’s high property appraisals overstate tax bill increases for many2022-04-21T05:00:00Z


COLLEGE STATION, Tex. (Texas Real Estate Research Center) – Many Texans have received notices this month that their properties appraised much higher this year than last. Such increases often leave property owners expecting exorbitantly high property tax bills the following year, but an economist with the Texas Real Estate Research Center (TRERC) at Texas A&M University says that’s a misconception.

"Many factors complicate how property taxes are calculated, but by and large the increases in property appraisals being reported vastly overstate the average increases in property tax bills that should be expected next January," said TRERC Research Economist Dr. Adam Perdue.

Texas’ appraisal districts are required to appraise all real property at fair market value each year, which Perdue said typically leads to manageable and understandable increases in tax appraisals. TRERC’s Texas Home Price Index showed a 3 percent average annual increase in statewide market value from 2007 to 2019, peaking at 7.6 percent between January 2013 and January 2014. However, in 2020 the average increase was over 9 percent, and in 2021 it hit a record high of almost 20 percent.

But in the case of such unusually high appraisals across the board, the appraisal process is only the first step in calculating the tax bill. 

"The second step is deciding on the tax rates," Perdue said, "and these are largely determined by the cost of providing voter-approved government services." Tax rates are recalculated each year.

After giving property owners the opportunity to protest the initial property valuations, the appraisal district submits the valuations of all properties to the local taxing jurisdictions which then calculate a tax rate that yields the revenue necessary to continue running the government services voters have requested and approved. 

"In an ideal scenario, where voters were happy with the previous tax bills and level of government services, even a 20 percent increase in average taxable valuations could be exactly offset with a 17 percent cut in the tax rate and yield the same tax bill for the same level of service, holding everything else constant," Perdue said. 

Perdue said many other complicating factors figure into the process. For example, the homestead exemption limits growth in taxable value to 10 percent per year, slowing the growth rate of homesteaded properties’ tax bills. An over-65 homestead exemption places a ceiling on the amount qualifying homeowners have to pay in school taxes (the primary component of property taxes).

"Relative differences in value increases will still impact your tax bill,' Perdue said. "If your value increased more or less than average, then your bill may increase more or less than average."

He said property owners also need to remember that any tax rate that would increase total revenues from existing properties by more than 3.5 percent must be approved by voters under state law.

Year over Year change in Texas Home Price Index

https://mailchi.mp/mays/news-release-ee769ze2hc16-0422