Texas Housing Insight
published on November 17, 2022
The housing market in Texas “continues to cool,” according to Housing Insight by the Texas Real Estate Research Center. The report cited increasing mortgage interest rates as the cause of diminishing housing affordability and, thus, demand.
In September 2022, home sales fell 15.5 percent in Texas, according to the report. “Under the aggressive monetary policies, housing demand will not recover any time before the central banks see significant progress on inflation … The rapid decline in housing sales has revealed how important low mortgage rates are to the latest housing frenzy.”
Following July 2022’s steep decline, home sales actually improved 10.9 percent. However, home sales in all four Metropolitan Statistical Areas in Texas shrunk by double digits on a year-over-year basis. Higher-end homes experienced more of a decline, affecting Austin the most. Sales for homes over $750k shrank 20 percent, while sales for homes priced below $300k were down 7.5 percent.
As far as pricing, the state’s median price increased 1.2 percent month over month to $346,000. “Although housing prices have been under market correction, they remain much elevated from year-ago prices, accelerating 11.3 percent YOY. Even for Austin, the price in this much-affected market was still up 5.6 percent YOY.”
Inventory ticked up across the state, with the statewide months of inventory at 2.6 months. San Antonio had 2.9 months of supply, followed closely by Austin, and Dallas trailed with 2.2 months. Six to six-and-a-half months of inventory is considered balanced by the Texas Real Estate Research Center. Additionally, permits for single-family construction dropped to a two-year low. Homes across the state were on the market 42 days on average, up from 29 days in March 2022.
Notably, the report stated, “The state’s housing inventory recovered to the level it was at when the housing frenzy first began. This great rebound suggests a calming housing market, considering the conspicuously low inventories of the past two years.”
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