Real estate is more than transactions. It’s a signal and byproduct of the broader economy, regional and local market forces, and personal preferences. Here, we’ll discuss the factors impacting housing right now and what we might expect going forward.
It’s Not Just the Interest Rate
Headlines shape perceptions. For the 320+ million people who don’t work in real estate, what they read influences how they think. The relationship between Federal Reserve rates and mortgage rates is complex, but for most people, the takeaway is simple—borrowing costs more than it used to, and that’s a problem. While interest rates certainly impact affordability, their psychological effect is often underestimated. Still, the reality is straightforward: higher rates mean higher monthly payments.
Before diving into the lesser-discussed challenges facing the housing market, let’s acknowledge this about interest rates—they are unlikely to return to 3%. And that’s not necessarily a bad thing. The era of cheap money, combined with COVID-driven demand, caused home values to surge, outpacing income growth at an unsustainable rate. How much did values rise? More than double the rate of income growth, putting homeownership out of reach for many.
But interest rates are just one piece of the puzzle. Consider these additional challenges:
Property Insurance Costs: In the past two years, insurance rates have increased more than 30%, with no signs of slowing. Higher premiums add to the overall cost of homeownership, straining affordability even further.
Rising Property Taxes: As home values increased, so did property tax assessments. For many homeowners, this has led to significantly higher tax bills, making it more expensive to stay in their homes.
Inflation & Supply Costs: The cost of goods and services—especially materials and labor in the construction industry—has risen sharply, impacting both new home development and renovations.
Technology & Job Market Shifts: AI and automation are transforming the workforce, affecting where and how people live. As job functions evolve, housing demand in different regions could shift in unexpected ways.
These factors contribute to a market where many homeowners feel stuck—unable to afford a move due to rising costs yet uncertain about the long-term stability of staying put.
For buyers and sellers in Central Texas, understanding these dynamics is critical. While higher interest rates are often the headline, the full story includes rising taxes, insurance, and broader economic shifts. As a real estate professional, my role is to help you navigate these challenges, maximize your investment, and position yourself strategically in this evolving market.
If you’re considering buying or selling, let’s have a conversation about how these factors affect your specific situation—and how we can create the best strategy for you. People are still moving to where we are. Let us help you sell or buy in an environment requiring real market understanding and expertise.
Our Growing Team
Crossings is growing! I’m excited to welcome agents who are great people who just happen to be great real estate professionals. If you know an agent who prioritizes their “why” and “how” above “what” and “how much”, put us in touch.
Photo credit: Seth Woodson
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One last thing.
What others say about us matters most. Thank you for trusting me to help.
Happy to help.
I’d love to help you navigate this market. Our team also has an extensive, nationwide referral network and would be honored to help you connect with an excellent agent anywhere in the country.
