Home Buddies – Home Ownership Coach – Houston, Texas

Texas Economic Update with Federal Foreclosure Bill

Texas continues to outpace the nation due to the continued strength in its energy sector. But the Texas economy is slowing; however, there are still many areas within the region that are showing strength. In addition, the likely of a foreclosure bill by the US Congress could help strengthen the Texas economy over the next year.

Employment Growth
To show how Texas is outpacing the US economy one only has to look at employment. For the US, employment fell in May by 0.4% and in Texas, employment grew by 1.3%.

Industry Data
Looking at industry data, Texas appears to be headed for a broad-based slow down. The service sectors provided most of the job growth that we saw throughout the state.

Gas Prices Affect Transportation
Although the trade and transportation sector had been growing through the first quarter, high fuel prices are causing a slowdown. Trucking and airline industries seem to be the hardest hit.

Real Estate and Construction
Texas seems to have already seen the worst. Not much has changed on these two fronts. Recent home sales continue to improve from previous months; however, we are still below the 12.9% levels from a year ago. Median home prices have held steady, which is a key factor to the health of markets. In addition, home inventories ticked down to a 6.3 months supply. These improvements suggest that the worst could be behind Texas especially if a foreclosure bill is passed by US Congress.

Foreclosure Bill
A “Foreclosure Bill” (Mortgage Forgiveness Debt Relief Act of 2007) appears imminent. The House is expected to pass the bill July 23, 2008. It has been mentioned in Washington that President Bush will be signing this bill, even though he has some opposition to parts of the bill.

The “Foreclosure Bill” would pump $300 billion dollars into mortgage and real estate markets. Although Texas has not experienced as high a foreclosure rate as other regions in the nation, the fiscal stimulus would help underpin the current stability and move Texas further along the way to recovery.

Outlook
Even though the Texas economy is better off than the national economy, it is still down significantly from the end of last year. With every consumer’s income being squeezed by rising fuel and food cost, and credit markets still in a recovery, the outlook for the second half of the year is expected to continue to be below average.

Cliff Pape

Home-Buddies