The Texas Real Estate Confidence Index, an index that gauges the outlook of realtors, builders and lenders for the performance of the Texas real estate market, dropped for the fourth quarter, compared with the same quarter last year and the third quarter of this year.
The drop is mostly attributed to the outlook of residential mortgage lenders. “A huge number of homeowner’s refinanced their mortgages when interest rates dropped several years ago. Now that the market for refinancing is all but dried up, the major source of financing business must come from the sale of new and existing homes. With so many mortgage lenders and brokers chasing a much smaller market, some of the smaller, less aggressive, and less well-known firms most likely will be weeded out,” said James H. Leigh, associate research scientist for the Real Estate Center at Texas A&M University, the producer of the report.
Residential realtors and builders also have lower expectations for the fourth quarter. Commercial lenders have the highest index score representing the most optimistic outlook.