In September 2018, current home construction activity in Texas reached the highest level since 2008, according to the latest report from the Real Estate Center at Texas A&M University. While the Residential Construction Cycle (Coincident) Index reached a recent high, the Leading Index ticked down for the first time in 2018.
Austin developed 11,339 new lots through the third quarter of 2018 and “showed signs of trending upward.” New permits in Austin dropped to 1,187 after a strong summer, but Austin maintained four percent growth for the year. Construction values were up 3.5 percent for the quarter in Austin, while values in the state were up 2.6 percent. Texas still remains the top state in the nation for new construction permits, with 16 percent of the United States total.
Most Texas areas experienced their largest months of inventory for the year, while still staying well below balanced markets. Austin inventory rose to 2.6 months. Dallas was up to 2.9 months, Houston was up to 3.8 months, and San Antonio was up to 3.4 months. Fort Worth dropped to below 2.4 months. About 6.5 months is considered balanced by the Real Estate Center. As a whole, the state was at 3.6 months of inventory. Most inventory gains were seen in the upper end price ranges. Homes above $500k experienced months of inventory above nine months.
Overall, Texas housing sales decreased 2.5 percent for the third quarter. According to the report, this is due to a shortage of homes below $300k, as well as rising interest rates. Austin kept its status as lowest percentage of homeownership among the large Texas metros, at 56.2 percent.
Median price for the state reached a record high of $231,900 in September 2018. Dallas and Fort Worth also reached record highs, with median prices of $289,500 and $234,700, respectively. The median price in Houston dropped to $232,500. Austin and San Antonio “balanced” but “trended upward” due to population growth, according to the report, with medians of $309,900 and $222,000, respectively.