A recent study predicts homeowners in many Texas Metropolitan Statistical Areas (MSAs) will see an increase in their home equity between now and 2012.
The study, conducted by the Center for Economic and Policy Research and the National Low Income Housing Coalition, is based on purchases of homes priced at 75 percent of the median price and financed at between 6 and 8 percent interest.
By 2012, the purchaser of a mid-priced home in the Houston, Dallas–Fort Worth and San Antonio MSAs will have, on average, more than $80,000 in equity in the house, the researchers predict.
Owners of mid-priced homes in the Austin–Round Rock MSA will see an equity price tag of just over $61,000.
El Paso mid-priced homes’ equity is predicted to be $49,000.
McAllen-Edinburg-Mission is predicted to fare the best in Texas, with just over $90,000 in home equity of mid-priced homes.
The positive outlook for Texas home equity growth comes as no surprise to Dr. Mark Dotzour, chief economist with the Real Estate Center at Texas A&M University.
“It confirms that there never was a price bubble in any Texas city, and, consequently, the likelihood of equity increase is higher,” Dotzour said. “I find it interesting that their policy decision is to recommend that government allows prices to continue to fall.”
Source: Dallas Morning News, Center for Economic and Policy Research