Texas Housing Market Rebounds
published on August 25, 2020
Texas housing sales rebounded almost 30 percent in June 2020, following three consecutive monthly declines due to COVID-related shutdowns, according to the Real Estate Center at Texas A&M University. The report cited falling interest rates and pent-up demand from the shutdown for the large increase, which resulted in the highest homeownership level on record.
The state homeownership level of 67.5 percent was within half a percentage of the national rate. Austin’s homeownership rate had the biggest increase, rising six percent to 65.3 percent, while Houston had the highest rate of homeownership at 68.2 percent.
Single-family construction permits are on track to exceed those in 2019, after recovering 14.6 percent in June. Texas is the leader nationally for single-family construction permits, making up 16 percent of the United States total. Austin issued 1,540 permits.
Few active home listings pushed Texas housing inventory to an all-time low of 2.8 months. Homes priced under $300,000 reached a supply level of under 2.1 months. Supply of luxury homes – those priced over $500,000 – decreased to below 7.2 months. About a six-month supply is considered balanced, according to the Real Estate Center, meaning all non-luxury home segments of the Texas real estate market have very low supply and are weighted toward sellers.
Coupled with record-low mortgage rates, home mortgage applications increased 9.8 percent, bringing them into positive year-to-date growth.
Median price increased 3.9 percent to $249,100, while annual price appreciation reached 4.2 percent.
For July 2020, the Real Estate Center projected sales “are expected to rebound completely from the pandemic-induced shutdown.” Statewide home sales are estimated to increase 22 percent, while Austin sales are expected to increase 24.6 percent.
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