San Antonio’s Summer Housing Market Cools Amid High Interest Rates, Say Experts

Summer Housing Market Cooling Down amid High Interest Rates

Usually a sizzling hot period for San Antonio’s housing market, the summer of 2024 is witnessing an unusual cooling down. Industry experts attribute this change directly to the escalating interest rates that have surprisingly simmered the usually heated housing market.

Inventory Surges While Interest Rates Climb

According to Spencer Skubik, an associate broker for Becker Properties, houses traditionally sell faster and at higher prices during the summer season. “However, this year we’ve witnessed a significant slowdown. Overpricing is a risky move in the current market scenario as properties are staying on the market for a longer duration. With an excess of inventory, competition has stiffened,” Skubik explained.

Dip in Home Sales amidst Rising Interest Rates

Experts posit that the hike in mortgage interest rates plays a significant role in this scenario. By June, the rates had swollen higher than the beginning of the year, leading to a downturn in the housing market. In May, records from the local board of realtors reflected a 3% decline in house sales compared to the same period in 2023.

“Many potential buyers are choosing to hold back their purchases in anticipation of a drop in interest rates. Unfortunately, the expected decrease has been repeatedly delayed. The situation is beginning to seem uncertain as it remains unclear if the rates will be lowered as much as initially thought,” Skubik added.

The Impact of High Interest Rates on Home Buyers

Prospective home buyer Alberto Trujillo’s decision to upgrade to a larger house has been largely influenced by the prevailing interest rates. Trujillo stated, “Right now, my house interest rate is very low. However, getting a loan right now means dealing with exceedingly high-interest rates, almost triple my current ones. This is quite disheartening.”

Interest rates form a crucial part of Trujillo’s financial planning while deciding his budget for a new house. He notes, “Given the high-interest rate, a significant part of the investment is consumed in paying interest on loans rather than investing in a more valuable property.”

What the Future Holds

With the current cooling down of San Antonio’s summer housing market, the future seems uncertain for both buyers and sellers. As everyone awaits a potential decrease in interest rates, the city’s housing industry is experiencing an unusual summer. Nevertheless, experts remain optimistic that the market will adjust and regain normalcy. Until then, buyers and sellers are advised to stay informed and approach the market with caution.