Houston home sales in all price ranges gained momentum in May, while inventory continued to increase.  Since February, homes priced from $250,000 – $500,000 have had the largest gains.  Inventory of single-family homes increased to a 4.2-months supply. That is up from 3.9 months last year and is the largest supply of homes since August 2017. The average days on the market dropped to 53 days. Days on the market is closely tied to pricing the home correctly when initially listed. Homes that are overpriced, and do not correlate with location and condition, tend to sit on the market longer.

Category	Jan. 2019	Feb. 2019	Mar. 2019	Apr. 2019	May 2019	June 2019	July 2019	Aug. 2019	Sept. 2019	Oct. 2019	Nov. 2019	Dec. 2019
Total Property Sales	5,011	6,388	8,475	9,063	9,948	9,461	10,478	10,375	8,430	8,579	7,577	8,879
Total Active Listings	38,872	39,304	41,127	42,086	43,624	45,262	45,498	45,062	44,172	43,468	42,139	38,504
Single-Family Home Sales	4,100	5,280	7,072	7,586	8,346	8,097	8,953	8,679	7,035	7,231	6,395	7,505
Townhome/Condominium Sales	329	429	542	586	661	587	687	638	531	501	447	575
Single-Family Months of Inventory	3.7	3.7	3.9	4.0	4.2	4.4	4.3	4.2	4.1	4.0	3.8	3.4
Single-Family Pending Sales	6,528	7,310	8,740	9,467	9,169	8,796	9,207	8,547	7,285	7,682	6,925	5,796
Days on Market	65	68	64	57	53	49	50	52	55	59	59	63

Price Range	Jan. 2019	Feb. 2019	Mar. 2019	Apr. 2019	May 2019	June 2019	July 2019	Aug. 2019	Sept. 2019	Oct. 2019	Nov. 2019	Dec. 2019
$1 - $99,999	155	153	188	135	171	132	141	147	134	129	133	216
$100,000 - $149,999	340	392	461	438	445	377	490	423	371	414	382	487
$150,000 - $249,999	1,496	1,905	2,428	2,653	2,982	2,794	3,100	3,019	2,497	2,632	2,197	2,948
$250,000 - $499,999	1,164	1,647	2,275	2,543	3,009	2,846	3,089	2,991	2,315	2,311	2,043	3,074
$500,000 - $749,999	169	239	345	400	517	497	541	465	381	347	294	427
$750,000 and above	107	142	238	284	372	334	315	296	210	224	180	309

Looking for ways to save money on your mortgage? Refinancing or recasting can help you, but they work differently.  Make sure you choose the right one.

Recasting:

Recasting is when you change your existing loan after prepaying a substantial amount of your loan balance. For example, you might make a sizeable lump-sum payment, or you may have added extra to your monthly mortgage payments—putting you ahead of schedule on your debt repayment. Your lender can recalculate your monthly payments based on your low loan balance, resulting in a lower required monthly payment. Since your loan balance is smaller, you’ll also pay less in interest over the remaining life of your loan.

Pros and Cons of Recasting:

The main advantage of recasting is simplicity. Your lender probably has a program that makes recasting easier than applying for a new loan. Lenders charge a modest fee for the service, which you should more than recoup after several months of improved cash flow.

Approval: Qualifying for a recast is different from qualifying for a new loan, and you might get approved for a recast even when refinancing is impossible for you. You already have the loan—you’re just asking for a re-calculation of the amortization schedule.

• You don’t need to provide proof of income, document your assets (and where they came from), or make sure that your credit scores are free of problems.
• Lenders may require that you prepay a minimum amount before you qualify for recasting.
• Government programs like FHA and VA loans generally don’t qualify for recasting.
• Recasting for jumbo loans is not available from all lenders.

Interest rate and payment: When you recast a loan, the interest rate does not change (but it usually changes when you refinance). Several inputs determine your monthly payment: The number of payments remaining, the loan balance, and the interest rate. But when you recast, your lender only changes your loan balance.

Note that recasting a loan is not the same as loan modification. If you’re underwater and facing financial hardship, there might be other ways to change the terms of your loan or refinance.

Refinancing:

Refinancing happens when you apply for a new loan and use it to replace an existing mortgage. Your loan should be smaller than it was when you originally borrowed, so you enjoy a lower monthly payment. In most cases, it only makes sense to refinance if you’re getting a lower interest rate, so you could spend less on interest.

Pros and Cons of Refinancing:

Like recasting, refinancing also lowers your payment (usually), but that’s because you re-start the clock on your loan.

New features: The primary reasons to refinance are to secure a lower monthly payment, change the features on your loan, and possibly get a lower interest rate. If you get a new loan, you choose how long the loan is structured: Will it be a 30-year mortgage, a 15-year fixed-rate loan, or an adjustable rate mortgage (ARM)?

Higher costs: A new loan typically costs more than a recast.

• You have to pay closing costs, including appraisal fees, origination fees, and more.
• A more significant cost might be the extra interest you pay. If you stretch out your loan over a long period of time—getting another 30-year loan after paying down your existing loan for several years—you have to start from scratch. With most loans, you pay more interest in the early years, and you pay down most of the principal in later years. A new long-term loan will put you back in those early, interest-heavy years.

Make Informed Decisions:

Recasting or refinancing may not be for you. If you really want to save money, you can prepay your mortgage (whether in a lump-sum or over time) and keep making your monthly payments as well.

If you recast, you gain the ability to make smaller payments, but you don’t pay off debt any faster. If you refinance, you might actually pay off your loan later than originally anticipated, and you keep paying interest for the life of the loan. If you prepay and continue making the original monthly payment, you’ll save money on interest and pay off your mortgage early.

For more information about recasting, refinancing or new loans, please call Rob Hanlen, Network Funding LP, 713.298.2300 or [email protected]. Rob can help you find the best loan for your needs. In many instances, he can close new loans in 10 days.

Information provided by The Balance.