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If you’re thinking about buying a house in El Paso this year, there’s good news and bad news. First, the good news: You’ll have more options to consider. In May of 2023, inventory in the city increased by more than 17 percent versus a year earlier, according to the Greater El Paso Association of Realtors (GEPAR), with more than 1,000 new listings hitting the market. Now, the bad news: You’ll pay more than last year, too. El Paso’s median sale price jumped by 7.5 percent compared with May 2022.
Read on for everything you need to know to successfully navigate the busy housing market in El Paso and find a new home.
Deciding where to live in El Paso
No matter where in this border town you choose to live, you’ll enjoy an impressive level of affordability. The cost of living here is cheaper than most big Texas hubs, like Dallas and Austin, and it’s lower than other Southwestern cities like Albuquerque, too.
If budget is a major concern, note that some areas are more affordable than others. The median home price in the metro area overall is $255,950, per GEPAR, but prices look quite different from one part of the city to another. In central El Paso, for example, the median price tag in May was much lower at just $180,000, while in the Upper Valley, it was much higher: $349,525. However, even the Upper Valley median is still lower than the nationwide median home price of $388,800.
How to buy a house in El Paso
Saving for a down payment in El Paso
How much money do you need to save for a down payment in El Paso? The answer comes down to the price of the house and the type of mortgage you’re using to pay for it. Remember that a bigger down payment now means smaller monthly mortgage bills later: The more you pay upfront, the less you have to borrow.
- With a conventional loan, you may be able to put just 3 percent down. On a median-priced $255,950 El Paso home, that comes out to $7,678. But to avoid having to pay for private mortgage insurance, you’ll need to put down 20 percent, which is a much steeper $51,190.
- For FHA loans, you’ll need a down payment of at least 3.5 percent, or 10 percent if your credit score is below 580.
- If you qualify for a VA or USDA loan, you might actually need no down payment at all.
Get preapproved and find the right mortgage lender
One of the most important steps of buying a home may only take you 15 minutes. Getting preapproved for a mortgage doesn’t ultimately mean you’re approved to buy a home — that’s why the “pre” is there — but it does indicate a strong likelihood that a lender will loan you the amount spelled out in your preapproval letter. In a competitive market like El Paso, that might be a big help. Be prepared to send over a stack of information about your finances, including pay stubs, tax returns, bank account information and more.
You don’t have to actually get your mortgage from the lender that issues your preapproval. Instead, it’s smart to compare offers from a few different lenders to see who can offer a mix of a competitive rate, low fees and a closing timeline that fits your needs. Start your search with the best lenders in Texas. Keep in mind, too, that you don’t necessarily have to borrow money from a bank or a credit union in El Paso. There are loads of online lenders that may be able to meet your needs.
Find the best local real estate agent in El Paso
While you aren’t required to use an agent to buy a home, working with a knowledgeable local real estate agent will make a huge difference in a challenging market like El Paso. Homes are still selling very quickly here — in around two weeks, per GEPAR — which keeps the housing market fairly hot even as it cools down in many other parts of the country. Realtors know the ins and outs of negotiating with sellers, competing with other buyers and finding good deals; having one by your side to help you navigate the process will keep things fast and efficient.
Start house hunting and make an offer
When you’re ready to start looking for a home, it’s important to think about what really matters. Do you want a walkable neighborhood with loads of activities? You may want to start your search near downtown in Magoffin or El Segundo Barrio. Or are you more concerned with being near the best schools for your kids, or having a big backyard where they can play? Think about your lifestyle today, along with what you expect your lifestyle to be over the next several years.
And when you find a place you love, don’t delay. El Paso homes typically sold in just 16 days in May, and an even faster 12 days in April. That’s a very tight timeline, and an indication that you may be competing against other buyers. Work with your real estate agent to craft a compelling offer that will catch the seller’s attention, and address any questions or concerns promptly.
Get a home inspection and appraisal
Even after your offer is accepted, there’s still more work to be done. The first step is to get a home inspection, which will help alert you to any issues that may need addressing. While an inspection isn’t necessarily a requirement, it is the smartest $500 (perhaps more or less, depending on the size of the property) you can spend. Plus, if problems are found, you may be able to negotiate a lower price or concessions from the seller.
Your mortgage lender will require a home appraisal to verify that the price you submitted in your offer is indeed an accurate reflection of the property’s value. The lender needs to know if you default on the loan for whatever reason, it will be able to recoup its losses.
The property isn’t the only thing that will be evaluated. You and your credit history will also be under scrutiny during the mortgage underwriting process. During this time, make sure you avoid making any big changes to your financial picture such as switching jobs or opening a new credit card.
Requirements to buy a home in El Paso
Can I afford a home in El Paso?
El Paso housing costs are certainly cheap compared with many other parts of the country: The median price tag of about $256,000 is more than $130,000 below the nationwide median. It’s a particular bargain compared to some other Texas hotspots, like Austin, where the median price per the latest Redfin data is $570,000.
However, prices are actually on the rise in El Paso. GEPAR data shows that the May median is 1.7 percent higher than it was in April, and 7.5 percent higher than May of last year. And today’s high mortgage rates aren’t making homebuying any easier. Bankrate’s affordability calculator can help you determine how much house you can afford based on your monthly income and your other recurring bills.
First-time homebuyers in El Paso
Being a first-time homebuyer can be daunting, but it’s actually a great position to be in — because you may be eligible for down payment assistance. In addition to first-time buyer programs in Texas, the city of El Paso has programs designed to help low- and moderate-income buyers. For example, qualified buyers might be able to get up to $5,000 of down payment and closing cost assistance in the form of a forgivable loan, which is totally wiped away if you stay in the home for 10 years.
After all the work that goes into buying a home in El Paso, you’ll need to know what to expect at the closing. This breaks down into two basic categories: signing your name a lot, and handing over lots of money.
In addition to signing a large stack of legal documents — a good reason to hire a real estate attorney, even though you might not be required to — you’ll also need to hand over a sizable check to cover your closing costs. In Texas, closing costs typically add up to around 1.5 percent of the purchase price, according to data from CoreLogic’s ClosingCorp. In El Paso, that comes out to $3,839 on a median-priced home. Once the closing is complete, you can officially call yourself an El Paso homeowner.
El Paso offers easy access to the outdoors and a vibrant intersection of Mexican and American cultures, all for a relatively cheap price tag. The cost of living in El Paso is lower than other Texas cities, such as Austin and Dallas, and also lower than Southwestern hubs in other states, like Albuquerque and Phoenix. Home prices are below the national average, as well.
No, they are rising. The median home price in El Paso was $255,950 in May 2023 — an increase of 1.7 percent from the previous month and 7.5 percent from May of 2022.
The median sale price in Central El Paso was just $180,000 in May 2023 — more than $75,000 cheaper than the entire metro area, according to the Greater El Paso Association of Realtors. The Lower Valley area featured a median price of $191,975, another relative bargain for the city.