Texas Housing Market May Be Economic Hero of 2020
published on December 15, 2020
Texas Real Estate Research Center at Texas A&M University Senior Data Analyst Joshua Roberson explored the toll of the pandemic on the Texas economy in “Retreat or Resurgence: Which Direction is Texas Housing Headed?” Roberson premised that, years from now, the housing market’s surprising resiliency may be of great note to those who follow the economy.
“Few expected such a rapid recovery in the housing market,” he wrote, “especially after the last recession caused by the mortgage market collapse. Unlike last time, the housing market may end up the economic hero of 2020.”
Despite abrupt changes in the housing market earlier in the year, sales and new construction are now up, in some cases dramatically, and mortgage rates and foreclosures are down. “Home sales had an impressive surge in June and July. By the end of summer, year-to-date sales had roared back, and the market was poised for another consecutive year of annual sales growth.”
Roberson credits the pre-pandemic economy for the market’s resiliency. “National unemployment rates had dwindled to historic lows, and labor participation was on the rise. The tightening slack in the labor market resulted in a significant boost in real income growth in 2019. Texas was among the states leading economic growth for most of the decade. No wonder many Texas households were as prepared as possible for the economic headwinds brought on by the pandemic.”
Low mortgage rates also had ignited a now or never mentality, he wrote, particularly prompting millennials to purchase homes. “According to Realtor.com as well as other industry experts, millennials were responsible for the largest share of primary home purchase mortgages in 2020.” This bodes well for Texas, he wrote, because “Texas has a larger proportion of millennials than the nation as a whole.”
Roberson does caution on supply issues and potential “mortgage payment peril.” Read more about Texas’ retreat or resurgence in Roberson’s full article.
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