Homebuyer Education

Historic Interest Rates: A Roller Coaster Ride Through Texas Real Estate

February 9, 2023

From boom to bust: The highs and lows of Texas housing market

In the late 90s, interest rates hit an all-time low, leading to a housing boom in Texas. People were eager to buy homes and take advantage of these low rates. This surge in demand caused home prices to soar and created a bustling real estate market. However, as rates began to rise again in the early 2000s, the market cooled off. Potential buyers were less eager to purchase homes due to the increase in monthly mortgage payments. This slowdown in the housing market led to a decline in home values, causing a bust for the Texas real estate market.

The Great Recession: When interest rates hit rock bottom

During the financial crisis of 2008, interest rates plummeted to historic lows. The Federal Reserve dropped rates to stimulate the economy and encourage borrowing. This drop in interest rates made it easier for Texans to buy homes, as monthly mortgage payments became more affordable. However, the lower interest rates also led to an increase in foreclosures. Many people who were unable to keep up with their mortgage payments found themselves facing foreclosure. This was a dark period for the Texas housing market, but the low interest rates provided some relief for those who were able to take advantage of them.

Rates on the rise: The new normal in Texas real estate

In recent years, interest rates have gradually increased, returning to more typical levels. This has made it more difficult for some Texans to buy homes, as monthly mortgage payments have become more expensive. However, this increase in rates has also helped stabilize the housing market. With rates at a more sustainable level, home values have become less volatile, providing stability for both buyers and sellers. This new normal in Texas real estate has created a balanced market that is more stable and less prone to drastic fluctuations.

Looking to the future: What do Texas interest rates have in store?

It’s impossible to predict the future, but experts believe that interest rates will continue to rise in the coming years. This means that Texans should plan accordingly and be prepared to pay more for their mortgages. However, there are still many factors that can influence interest rates, such as economic conditions and government policies. It’s important to stay informed and be prepared for any changes that may occur in the future.


This historic journey of Texas real estate shows us the power interest rates have on the housing market and how it affects the average Texan looking to buy a home. From the boom of the late 90s to the bust of the early 2000s, and from the lows of the Great Recession to the stability of the present, interest rates have played a crucial role in shaping the Texas real estate market. The future is always uncertain, but we can learn from the past and be prepared for what’s to come. Whether you’re a potential home buyer or a seasoned real estate investor, understanding the impact of interest rates is crucial for making informed decisions in the Texas housing market.