Single family home sales in Texas are expected to increase by 6.6 percent in 2018, according to the Real Estate Center at Texas A&M University, even as builders statewide are continuing to struggle to meet affordable housing needs.
It’s a “difficult task” to build homes priced less than $300,000, due to rising land costs and shortages in skilled labor, said Real Estate Center Research Economist Dr. Luis Torres. However, “The state’s economic acceleration and employment growth bode well for housing demand. Prices should ease slightly as homebuilders stretch to build more entry-level and first move-up homes, generally priced from $150,000 to $250,000,” he said.
Housing permits were up 8.2 percent in 2017 statewide, with Austin permits increasing 12 percent, Dallas permits increasing 12.1 percent, Fort Worth permits increasing 26.3 percent, and San Antonio permits increasing 16.3 percent. Houston only experienced 3.4 percent growth but was still the national leader in single-family home permits.
Housing starts were up three percent in 2017 statewide. Torres said that after a 29.5 percent spike the year before, Austin “maintained elevated single-family start levels, leading the state in per capita terms. Despite these supply-side shifts, builders struggled to meet single-family demand.” DFW home starts increased 10.8 percent in 2017, which was the sixth straight year of double-digit growth. San Antonio housing starts were up 10 percent, and Houston housing starts were up 8.2 percent.
Austin had the highest resale home median price in Texas, at $266,775, and also the highest overall median price at $291,904. The median statewide price for resale homes was $211,844, an increase of 6.8 percent, and the median overall price in Texas was $222,106, an increase of over $13,000.
As far as inventory levels, Austin experienced eight percent growth for resale and new home inventories. With a 6.5 month supply considered a balanced market, according to the Real Estate Center at Texas A&M University, the Austin resale market ended 2017 with a 2.1 month supply and the Austin new home market ended 2017 with a 4.7 month supply.