Houston Agent Magazine recently cited a SmartAsset report which found Houston to be the fourth-best city for first-time homebuyers. SmartAsset generated the report using a variety of metrics, such as market volatility and average value per square foot. Let’s take a look at how these metrics impacted Houston’s ranking.

Aerial view of homes in Houston

Mortgage Lenders

Houston led the country in the number of HUD approved mortgage lenders. HUD approved lenders can extend different loans that are backed up by the federal government. In many cases, this can help families to get home loans that they would otherwise have difficulty paying for.

Loan Funding Rate

The loan funding rate is a percentage of how many conventional mortgage loans were issued in comparison to how many conventional mortgage loan applications were made. According to SmartAsset, Houston had a loan funding rate of 71 percent, meaning the majority of loan applications were approved. Homebuyers needing a loan have an easier time getting approved in Houston than in most other cities.

Average Value Per Square Foot

The average value per square foot in Houston is $87.50, making the value per square foot for Houston homes higher than many other places in the country.

Housing Market Volatility

Housing market volatility refers to the amount that annual housing prices change from one year to another. The lower the volatility, the less likely it is for housing prices to change drastically over time. According to SmartAsset, Between 2012 and 2017, the market volatility rate in Houston was only 2.8 percent. For homebuyers, this means there’s little worry that the price on homes will shift dramatically while they’re shopping around for houses.

Negative Quarters Since 2012

This statistic refers to how many times the price on homes fell from one quarter to another. Amazingly, Houston had zero quarters in which the prices on homes fell. The city experienced steady growth over time, leading to increasing demand for homes in the Houston area.

Homeowner Stability Index

When people buy homes in Houston, they tend to live there for a long time, as indicated by the homeowners stability index. This metric tracks the number of years that homeowners stay in their homes. The metric also tracks home equity. As defined by Citizens Bank, when the amount of loans on a home is higher than the home’s market value, it’s called negative equity, and this decreases the stability index. Basically, you don’t want the amount of your loans to be more than the value of your house. In Houston, not only do homeowners stay in their homes longer, but their homes are worth more than their loans in the majority of cases.